Recent reports indicate that Alibaba Group (BABA) is considering placing a significant order with U.S.-based Advanced Micro Devices (AMD) for 40,000 to 50,000 units of the MI308 AI accelerator chips. This potential transaction drove up AMD’s stock price in pre-market trading, though the gains moderated after the market opened. The news comes shortly after AMD’s Chair and CEO, Dr. Lisa Su, concluded a visit to China, during which she engaged in discussions with officials from China’s Ministry of Commerce on topics including the company’s development in the Chinese market.
This development unfolds against the backdrop of recent adjustments to U.S. chip export policies toward China. According to reports, the U.S. government will allow NVIDIA (NVDA) to sell specific artificial intelligence chips to China and plans to impose fees on related transactions. It has also indicated that similar arrangements will apply to companies such as AMD and Intel (INTC). In this environment, potential orders from major Chinese tech companies could suggest that demand for Western chip manufacturers persists, at least in the short term.
The AMD MI308 AI accelerator chips mentioned in the reports are widely regarded as strong competitors to NVIDIA’s data center GPU products. In the race for AI computing power, AMD is striving to expand its market share, and the trend of customers seeking supply chain diversification is seen as favorable for the company. Wall Street has recently shown bullish sentiment toward AMD, with several institutions issuing positive ratings and higher target stock prices. AMD’s share price has already seen significant gains this year.
While the potential order could bolster market confidence in the sustainability of AMD’s demand, analysts also caution that it remains uncertain whether the deal will ultimately materialize, as specific contract terms and timelines are still unclear. A cautious approach is advised. Overall, this development reflects the ongoing intense competition in the AI chip sector and the complex interplay within global supply chains.
