In another business-deal-gone-right for Advanced Micro Devices Inc. in chinese soil, the company is now going to provide China’s Alibaba giant with server chips with which to power the company’s cloud vision. Whilst Alibaba is most commonly known due to its e-commerce activities (through the Aliexpress and Taobao brands), the chinese company is diversifying, even going so far as entering the entertainment space. Now, Alibaba is bidding to carve itself an even larger piece of the cloud market from the likes of Microsoft’s Azure and Amazon’s Web Services.
The deal was announced this Friday at the Alibaba Computing Conference by Lisa Su (AMD’s CEO) and Simon Hu (president of Alibaba Cloud, the chinese giant’s cloud computing arm). Through it, AMD will see its Radeon Pro chips supporting and expanding upon the increasingly-in-demand cloud computing capabilities of the chinese company, which already powers around 35% of China’s websites.
This is another of AMD’s bids on diversifying itself. The Sunnyvale-based chipmaker has become an increasingly major player in the semi-custom business, with its CPUs and GPUs powering current and upcoming consoles from both Microsoft and Sony; supplying semi-custom CPUs to the chinese government; and, more recently, entering the aerospace industry through its parnership with CoreAVI. Though this is decidedly another kind of beast: this time, no investment in semi-custom engineering is needed, which should increase the company’s margins.
The news saw AMD’s shares jump 5% in pre-market trading on Friday. This is another notch on Lisa Su’s and AMD’s management belt, after lifting up a struggling company – whose market value hit rock-bottom only last February (at $1.83 a share) towards the current $6.75, a 268% increase. While this by no means guarantees a healthy and competitive AMD, it surely is better than the state the company was in just a few months ago.Source: Fortune
