Financial Data and Key Metrics Changes - AMD reported Q2 revenue of $7.7 billion, a 32% year-over-year increase, and guided Q3 revenue at $8.7 billion, representing a 28% year-over-year increase [4][5] - Data center revenue in Q2 was $3.2 billion, a 14% year-over-year increase, significantly impacted by MI 308 sales to China, which were not allowed in Q2 [5][6] - The company anticipates double-digit sequential growth in data center revenue for Q3, driven by the ramp of MI 350 [7][9] Business Line Data and Key Metrics Changes - The AI business is expected to see significant growth, with projections nearing $10 billion next year, driven by both existing and new customers [14][16] - The MI 350 ramp is expected to contribute to revenue growth, with strong customer interest noted [12][19] - The gross margin for the AI business is currently below the corporate average due to aggressive market share acquisition strategies [55][56] Market Data and Key Metrics Changes - The total addressable market (TAM) for AI has increased from $400 billion to over $500 billion, reflecting the growing demand for AI solutions [29][36] - AMD is engaged in over 40 active collaborations with various nations to explore sovereign AI opportunities, indicating a significant market potential [39][40] Company Strategy and Development Direction - AMD is focusing on expanding its AI business and enhancing its product offerings, including the upcoming launches of MI 400 and MI 500 [9][12] - The company aims to provide better total cost of ownership (TCO) for customers while maximizing gross margin dollars [55][66] - AMD is committed to supporting a diverse range of AI models, from foundational to smaller tier models, to cater to various customer needs [23][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatility in the AI business due to export controls affecting MI 308 sales, but expressed confidence in the long-term growth trajectory [46][48] - The company believes that the current AI adoption phase is just the beginning, with significant opportunities for growth in the coming years [90][88] Other Important Information - AMD's operational and supply chain teams are working closely with TSMC to ensure adequate wafer and memory supply to meet growing demand [25][26] - The company is navigating regulatory challenges related to AI sales in China, with plans to address the market if licenses are obtained [50][54] Q&A Session Summary Question: What is AMD's strategy regarding TCO? - AMD prioritizes performance as the key factor for TCO, ensuring competitive advantages in inferencing capabilities while also providing ASP benefits to enhance customer TCO [74][76] Question: Can you elaborate on the tier two and three workloads? - AMD is onboarding customers to deploy training on its infrastructure at scale, with a focus on preparing for future deployments [81][84] Question: What are AMD's views on overbuilding in the industry? - AMD sees ongoing CapEx spending and AI adoption as evidence of a growing market, emphasizing that the current phase of AI adoption is still in its early stages [88][90]