AMD's new AI chip is selling well. Well, relatively speaking: according to AMD's latest financial results for the second quarter of this year, the company sold roughly $1 billion worth of its Instinct MI300 AI GPU during the quarter, compared to nearly zero sales of the same class of hardware a year ago.

Overall, AMD's sales were up 9% year over year to $5.8 billion. Of course, this is relative to Nvidia's AI GPU sales, which reached roughly $20 billion in Q1 2024. In other words, AMD has done well to gain a foothold in the huge and lucrative AI GPU market. However, it is still miles behind Nvidia.

In this connection, AMD CEO Lisa Su noted that the company is basically selling as many Instinct MI300 AI GPUs as it can make. CEO Suh said of the Instinct MI300, "The overall supply chain is tight and will remain tight until 2025."(via Seeking Alpha)

Elsewhere, the news was mostly good, but some indicators were mixed. For example, PC processor sales were up 49% to $1.5 billion, which is quite impressive given that AMD is about to launch its new Zen 5 chip. Most of this $1.5 billion in sales will be pre-Zen 4 CPUs, which all bodes very well since Zen 5 looks very promising.

Until AMD's "Gaming" division's devastating 59% drop in sales year over year. To quote Lisa Su again, "Turning to the gaming division, sales fell 59% YoY to $648 million as semi-custom SoC sales declined as predicted. As we enter the fifth year of the gaming console cycle, semi-custom demand remains soft, and we expect sales to decline in the second half of the year compared to the first half.

"In gaming graphics, revenues increased year-over-year due to improved sales of our Radeon 6000 and 7000 series GPUs in the channel.

AMD did not release details on Radeon sales. However, our understanding is that "gaming" includes both console chips and Radeon graphics. In other words, the fact that overall gaming has dropped so sharply despite the "improvement" in Radeon sales suggests both that Radeon sales have been fairly snubby and that they have not improved much.

Overall, gaming now accounts for just over 10% of AMD's revenue and is declining. In fact, Lisa Su is predicting another double-digit decline for the gaming division in the next fiscal year.

Moreover, during an investor earnings call to discuss AMD's latest financial results, Suh did not say much about these gaming products. There were no upbeat promises about new gaming products that would turn things around. All of this makes for mixed feelings for PC gamers.

AMD is generally doing well and should have plenty of resources to invest in future chips. All is well. However, it still doesn't seem to be able to turn around its struggling graphics division. Halu

We would really, really like to see AMD put more pressure on Nvidia when it comes to graphics cards. So, despite these latest results, we hope that AMD has full confidence in its gaming division.