By Will Healy
Publication Date: 2025-12-22 17:00:00
Key Points
Throughout its history, Advanced Micro Devices (NASDAQ: AMD) has developed a reputation for closing or at least reducing the competitive gap with rivals. This was true when it challenged Intel‘s supremacy in prior decades and, more recently, its clashes with Nvidia (NASDAQ: NVDA).
This includes its rivalry with Nvidia in the AI accelerator market, and its upcoming releases have captured the attention of industry analysts. The question for investors is whether it is on the verge of catching up to Nvidia and ending its dominance. The more likely outcome is that AMD will narrow but not close the gap, and here’s why.
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The state of the AI accelerator market
Indeed, the semiconductor industry appeared caught off guard when it became clear that Nvidia’s AI accelerators powered OpenAI’s game-changing GPT-4 AI platform in 2023. Nvidia was so far ahead of rivals that even now, Nvidia holds an estimated 80% of this market, according to a Susquehanna analyst.
Moreover, closing the gap hinges on more than just processing power. Nvidia has its CUDA software platform, which has an army of loyal developers. That makes switching away from that architecture difficult.
Additionally, Nvidia offers rack-scale solutions that integrate with both its…
