Core Viewpoint - AMD is significantly smaller than Nvidia in terms of revenue, with AMD's scale being about one-fifth of Nvidia's. However, there is potential for AMD to capture market share in the expanding AI market, although analysts are skeptical about whether it is too late for AMD to compete effectively [1][10]. Market Dynamics - The AI market is experiencing a noticeable slowdown, with declining demand and increased supply leading to a sharp drop in H100 prices. This trend is causing end customers to prefer spot or on-demand pricing over long-term contracts [1][5]. - The gap between open-source and closed-source AI models is narrowing, reducing the sustainability of high prices for top AI companies. This could lead to a slowdown in the AI race and decrease demand for Nvidia chips [2][5]. Investment Trends - In 2022, AI and machine learning startups accounted for 35.7% of global venture capital transactions, with North America seeing nearly half of all venture capital funding directed towards this vertical. Investment in AI and machine learning startups grew by over 50% to reach $131.5 billion [5][8]. Competitive Landscape - AMD faces challenges as larger players are entering the market, and the demand for powerful GPUs may decrease as specialized startups begin to fail. Additionally, large enterprises are creating custom chips tailored to their workloads, further complicating AMD's position [8][11]. - AMD has a software tool for model migration between Nvidia's CUDA and AMD's ROCm, but optimization remains a significant challenge. The lack of a robust developer community for AMD gives Nvidia a competitive edge [9][10]. Company Performance - AMD has shown steady financial improvement since major acquisitions in the early 2020s, including Xilinx and Pensado, which have provided new revenue sources. However, the anticipated revenue streams are showing signs of weakness due to developer attention delays and the slowdown in the AI market [11].