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For years, investors had framed the computing debate as a battle between individual chips. Advanced Micro Devices (AMD) kept chasing Intel (INTC) for decades and, despite often beating it on multiple benchmarks, still lagged the computing giant for most of its history in terms of business success. Now AMD finds itself in a similar battle against Nvidia (NVDA), but this time, it isn’t necessarily about better chips. Nvidia’s moat, its ecosystem, is about to meet its rival, and the heat is coming from AMD.
On July 23, AMD unveiled its response to Nvidia's AI server ecosystem: the Helios rackscale. A rackscale is an AI computing system where the entire server rack is designed as one integrated system. It includes GPUs, CPUs, ultra-high-speed interconnects, cooling, and power components. So when looked at as a single product, the chip performance alone doesn’t determine which one is better. In my view, this plays to AMD’s strength and hits Nvidia directly where it hurts them.
