For well more than two decades, Intel has been the undisputed leader in the market for datacenter CPUs. Intel's Xeon processors powered the vast majority of servers, whereas AMD's processors commanded a single-digit market share just some seven or eight years ago. However, the situation has changed drastically. While Intel's Xeon CPUs still power the majority of servers, the most expensive machines now use AMD's EPYC processors. This is why AMD's datacenter business unit now outsells Intel's datacenter and AI business group, as observed by SemiAnalysis.
Indeed, AMD's datacenter segment revenue reached $3.549 billion in the third quarter, whereas Intel's datacenter and AI group's earnings were $3.3 billion in Q3 2024. Just two years ago, Intel's DCAI group earned $5 billion - $6 billion per quarter. But as AMD's EPYC processors have gained competitive advantages over Intel's Xeon CPUs, Intel has had to sell its server chips at significant discounts, which has reduced the company's revenue and profit margins.
