A new collaboration between Advanced Micro Devices Inc. (NASDAQ:$AMD) and Chinese internet mega-giant Baidu (NASDAQ:$BIDU) is on the horizon. The move for AMD is sought to optimize software for AMD”s Radeon Instinct GPUs in Baidu data centers. The partnership will undoubtedly accelerate AMD’s GPU selling units in China’s rapidly-growing AI space. 

Ever since the second quarter of this year, AMDS have prioritized the shipping of its Radeon Instinct GPUs. The product combines the company’s strength in heterogeneous computing with its use of open-source software. The GPUs utilize MI25, MI8, and MI6, based on “Vega”, “Fiji”, and “Polaris” GPU architectures.

Further, the GPUs are cost-effective, which will boost AMD’s competitive position within the AI and machine learning market. AMD stock has gained momentum, raising 54.2% in the past year. It drastically outperforms the industry at 27.3%.

What a Partnership with Baidu Means

AMD’s partnership with Baidu entails access to the large Chinese AI market. Baidu is perhaps the ideal dance partner: a leading pioneer of AI techniques in the Chinese industry, which absorbed more than 17% of all AI investments in 2016.

Last year alone, Baidu spent around $20-$30 billion investing in AI projects. Its main focus includes machine learning, deep learning, and natural language processing. In addition, China is sought to increase AI investments to create a total market worth more than 100 billion yuan (US $15.26 billion) over the next three years.

What this means for AMD? The higher spending on AOI will increase demand for GPUs.

Sustaining Momentum

With its recent release of Ryzen CPu and Radeon Vega GPu products, AMD is continuing its momentum with the unveil of its new Radeon RX Vega 56 and 64 graphics cards. AMD’s next tactic will be to tap into the augmented and virtual reality market with Radeon and Ryzen chips.

With all of its current competitive power, and a newly established Baidu partnership, AMD will reasonably see an expansion in the semiconductor market. 

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