What's going on?

AMD announced that it�s buying data center specialist Pensando earlier this week, in a deal that should open up a state-of-the-art sector for the US chipmaker.

What does this mean?

With digitization and hybrid working now the norm, there�s been a massive surge in demand for the data centers that house the servers underpinning the world�s IT infrastructure. That�s made operators build out even bigger centers, and in turn look for ways to make them run even more efficiently. Enter AMD: the chipmaker just announced the $1.9 billion purchase of Pensando, whose chips and software speed up processing times and reduce operating costs for data centers. It could be a game-changer: the deal will allow AMD to get its hands on Pensando�s cost-saving chips and a long list of big-name clients � including Goldman Sachs, Oracle, and Microsoft � to boot.

Why should I care?

For markets: Intel snoozes, Intel loses.
AMD�s been growing fast over the past few years, and a lot of that�s down to the market share it�s been poaching off data center rival Intel. The chipmaker went from controlling less than 1% of the market in 2017 to 18% at the end of last year, as Intel slipped from 98% to 76%. That might partly be why investors sent AMD�s stock up 1,300% and Intel�s just 12% over the same period… (tweet this)

The bigger picture: Nvidia�s in too.
AMD still has some stiff competition: Nvidia just released a new AI-powered chip designed to enhance data center performance, which could help cut down processing times from weeks to days. Issue is, the sheer amount of power it needs to do the job could put potential customers off � especially given how crippling energy prices are right now. That�s probably something Nvidia will need to fix if it wants to become a more significant threat to Intel and AMD in the space.