After AMD's gaming revenue crashes 40%, CEO Lisa Su declares "We are a data center-first company"

[midian182]

A hot potato: Rest in peace, dedicated consumer GPU makers. With Nvidia having long been an AI firm with a passing interest in making prohibitively expensive consumer graphics cards, AMD's boss has confirmed that Team Red now considers itself a "data center-first" company. With the data center segment making up about 63% of AMD's record third-quarter 2026 revenue, it's easy to see why CEOs are moving away from PC gaming to follow the money.

Su made her remarks in an interview with Yahoo Finance's Brian Sozzi, where she presented data centers as central to AMD's identity and growth.

"We are a data center first company, that is our profile and you know, people need more computing to power all these applications," Su said.

In a perfect illustration of the state of the current industry, AMD's Instinct accelerators and Epyc server processors pushed the company's Q3 revenue to a record $13.4 billion, up 97% from a year earlier. Meanwhile, its gaming revenue crashed 40% from a year ago to $773 million, mostly due to AI data centers gobbling up all the memory and other components, hiking the price of graphics cards.

It's all great news for Su, of course. She said that AMD's data center business was going to grow 50% sequentially from Q3 to Q4. "We're looking to double the business, more than double the business as we go into next year," she explained.

Su also addressed the increasing demand for AI hardware from industry giants. "We're a tech company that has a lot of resources and the ability to expand our supply and expand our ability to help our customers," the CEO said. "I want to be the best partner to the largest users of compute in the world."

While there has been plenty of nervousness around the massive spending on AI infrastructure recently, Su said the market can be "a little bit short-sighted" when judging AI spending. Her argument is that companies should invest now to meet demand several years ahead, even if investors question the immediate financial impact.

Su added that AMD is always investing for the long term, which she describes as roughly three to five years ahead. That doesn't sound promising for gaming fans hoping things will change anytime soon.

Rival Nvidia, of course, has gone even further down the AI-first route. In its latest reported quarter (Q2 FY2027), $89.02 billion, or 92.5%, of its revenue came from its data center business. Team Green doesn't even report gaming separately anymore, placing it instead within the broader Edge computing category that brought in $7.5 billion, or 7.5% of its overall revenue.

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After AMD's gaming revenue crashes 40%, CEO Lisa Su declares "We are a data center-first company"

 

[Haaky]

Now that all these companies have bled all us gamers, home computer builders, small businesses dry. And on there way to killing the home computer market, all they want to do is build there money draining, environmental killing data centers so they can make even more money. Spy on people, track and lord knows what.
When is enough enough?
They have more money than they could spend in 100 life times, but these greedy pieces of sh*t want it all.
Selling GPU that should sell for $400 an up are selling them for $1,000 and up.
Ram prices that once cost $150 for 32 Gigs of DDR5 is now $400, $500, or even more.
What happens when I school needs to replace there computers for office and classes?
Good luck with that.
These companies used to tailor to the gamer and home computer user, now we are the ones getting the shaft.
Karma is a b*itch and they will get whats coming to the.
Nvidia, AMD, Intel and all the rest are nothing but a bunch of scammers and I personally can't wait to see the market fall out from under there feet.
Unfortunately that will never happen.

 

[The Talking Tech]

It is so easy for these CEOs to forget all of the sudden that we the gamers gave their companies the reputation and success when A.I was just a science fiction term in movies.

 

[OortCloud]

We need some new players in the market. AMD an Nvidia have completely gone to the dark side and Intel just gave up trying.

 

[yRaz]

Ever since AMD took over with EPYC, this is normal for them. Basically all of the nVidia systems have Epyc CPUs at the heart of each server and the switches between them, too. AMD has been losing gaming market share in GPUs for several years now. Everyone always said it was because they didn't have a 90 class GPU. Look at the steam surveys, 90 class GPUs account for barely over 1% of gamers. 80 class gamers account for barely 5%. Even when AMD cards made sense at every price point, people still bought nVidia cards. 9070XT trades blows with the 5070ti but it's $400 cheaper. It's mostly the nvidia tax on DLSS and frame gen which I don't value anywhere $400.

I think nVidia has become more of a fashion statement. There is basically no reason to buy an nVidia card outside of maybe wanting to have access to the CUDA software stack or AI. I saw 5060ti's going for 9070XT month a couple months ago and wanted to switch timelines.

 

[James321]

NO problem, I will keep it in mind when I need an upgrade again and referring people where to buy their PC hardware from.

Now that they are data center 1st approach, will they stop making GPU's for the Xbox and Playstation?

Money is money sure someone else will be more than happy to take over the business...

 

[yRaz]

We need some new players in the market. AMD an Nvidia have completely gone to the dark side and Intel just gave up trying.

I don't think that's the problem. I think so many gamers have been green washed by nVidia that noone wants to buy Intel or AMD cards. There is a certain ick factor to anything that isn't NV. People are willing to pay so much for a logo that it doesn't matter what anyone else offers.

Here is something interesting, Aredeno graphics in ARM SOCs are actually pretty powerful. You aren't going to playing CP77 with pathtracing at4k on them, but they can a better-than-steamdeck experience. Now that Valve has gotten to the point where the only thing holding back proton is anticheat they've started working on an ARM compatibility layer.

 

[TechSavy101]

This is what happens when governments which are supposed to act in the interest of their PEOPLE, act for their own profit interests. Dogshit trump has personally invested millions in Ai and crypto and gave these bozo CEOs a free pass to do whatever they want. He even said oh these companies will monitor & regulate themselves, yeah right. ****ing corrupted *****.

 

[NumberNine]

Correction Lisa, you are a "money first" company. If cookware had the best margins you'd be diversifying.

 

[Theinsanegamer]

It is so easy for these CEOs to forget all of the sudden that we the gamers gave their companies the reputation and success when A.I was just a science fiction term in movies.

NO problem, I will keep it in mind when I need an upgrade again and referring people where to buy their PC hardware from.

Now that they are data center 1st approach, will they stop making GPU's for the Xbox and Playstation?

Money is money sure someone else will be more than happy to take over the business...

I love how everyone is turning into Ethan Ralph.

"YOU OWE ME YOUR LOYALTY, I MADE YOU BIIIIIISH!".

 

[James321]

I love how everyone is turning into Ethan Ralph.

"YOU OWE ME YOUR LOYALTY, I MADE YOU BIIIIIISH!".

Backstabbing customers is not good business. You can ask any other business !!!

She could have handled it much better then this I-diotic statement.

They don't owe me anything, but I also don't owe them anything neither does anyone else and they should remember that.

 

[Linux Mint Xfce]

GG AMD, NVIDIA. When the AI bubble bursts you are both screwed!

 

[acrossthestars]

Pride cometh before the fall

One of two things is going to happen:
1. The entire PC (personal computer, not private computer) market disappears and ONLY the data centers remain, but since no one can actually use the resources, their revenue collapses because the circular funding rounds stop after investors ask for their money back. But, it's already too late.
2. The incumbent players are unseated by fresh blood, probably using RISC-V, and the cycle resets

It's gonna HURT in the short term. No way around it.

 

[Squid Surprise]

Wow, entitled much? Why should gamers be dictating what a multi-billion dollar company decides to manufacture?

Why should playing video games take priority over enterprise tech that is literally reshaping our world in real time?

You don’t NEED to be playing video games on the latest cards - and if you disagree, then you can PAY for the PRIVILEGE.

We live in a capitalist society - asking a company to focus on something niche that will give modest profits at best over something HUGE that gives ASTRONOMIC profits would be what a deranged dictatorship would want… and hey, even the dictatorships are pushing AI…

But don’t despair - supply always meets demand. The supply chain WILL recover and you’ll be able to buy your favourite GPUs in a few years.

 

[yRaz]

Wow, entitled much? Why should gamers be dictating what a multi-billion dollar company decides to manufacture?

Why should playing video games take priority over enterprise tech that is literally reshaping our world in real time?

You don’t NEED to be playing video games on the latest cards - and if you disagree, then you can PAY for the PRIVILEGE.

We live in a capitalist society - asking a company to focus on something niche that will give modest profits at best over something HUGE that gives ASTRONOMIC profits would be what a deranged dictatorship would want… and hey, even the dictatorships are pushing AI…

But don’t despair - supply always meets demand. The supply chain WILL recover and you’ll be able to buy your favourite GPUs in a few years.

AMD Reports 2016 Third Quarter Results

SUNNYVALE, CA -- (Marketwired) -- 10/20/16 -- AMD (NASDAQ: AMD) today announced revenue for the third quarter of 2016 of $1,307 million, operating…...

ir.amd.com

AMD has always been an enterprise first company, I don't understand why this is a difficult concept for people to understand.

 

[maxxcool7421]

NO problem, I will keep it in mind when I need an upgrade again and referring people where to buy their PC hardware from.

Now that they are data center 1st approach, will they stop making GPU's for the Xbox and Playstation?

Money is money sure someone else will be more than happy to take over the business...

Um, who are you going to build from?
AMD-nope
Intel-nope
Nvidia-nope
Arm-nope
Risc-v .. maybe in 8 years ... for retro gaming.

Gaming is 99% dead. this is the end all because people want AI porn of their friends and celebrities.

 

[agentnate009]

Correction Lisa, you are a "money first" company. If cookware had the best margins you'd be diversifying.

Dr. Lisa Su brought AMD back from virtually dead, broke and on life support to competing with Nvidia and Intel in the Enterprise/AI spaces. They are pulling in more money this quarter than the once dominate Intel. As a CEO, she righted the ship and is following the money because 700 million from gamers is chump change compared to the deep pockets of big tech.

 

[agentnate009]

GG AMD, NVIDIA. When the AI bubble bursts you are both screwed!

No, Enterprise is still a thing, and they may start focusing on gamers again, but they won't be screwed.

 

[maxxcool7421]

No, Enterprise is still a thing, and they may start focusing on gamers again, but they won't be screwed.

Even if AI busts, Datacenter still need building by the hundreds, mining imaging, medical imaging, crypto will keep eating dies and cards. AMD barely made 800,000,000$ on gamers. why ever go back when the profit per transaction is so small.

 

[Chris Rchr]

I wouldn’t be surprised to see her flip-flop—much like a politician—the moment the bubble bursts (if it ever does), only to tell us that we, the players, have always been in her heart and her top priority...

 

[yRaz]

Even if AI busts, Datacenter still need building by the hundreds, mining imaging, medical imaging, crypto will keep eating dies and cards. AMD barely made 800,000,000$ on gamers. why ever go back when the profit per transaction is so small.

Well mostly because making SOCs for MS and Sony are big money but they classify that as enterprise. They did make a lot of money off of gamers during Covid but then AI hit and that basically syphoned all the money and hardware into the AI toilet. Typically, 20% margins were considered good, but now they have people willing to pay 100-200% margins for AI hardware.

What people seem to forget is that all these companies are enterprise companies first and datacenters existed long before AI did. The backbone of the internet runs on datacenters, all streaming services and game services are running on datacenters. The problem is specifically the AI datacenters that are lighting money on fire and the investors willing to dump trillions into a market that doesn't really exist. Then anytime something catches on with AI that has mass market appeal, it ends up getting banned or locked down. I don't just see AI companies not making money, I see them actively banning things that people are willing to pay for them to do because some other massive company says "this hurts our bottom line, stop it or we'll sue you"

 

[Aolish]

I don't think its a big deal despite what many companies are doing, which is catering to data centers. Current GPUs are fine and so much still can be done with them. This will force developers to get more out of current generation hardware instead of brute forcing their way in. We all know optimizations can go a seriously long way, and with DLSS, frame gen, DLAA, XESS, FSR, upscaling techniques etc. make current generation hardware a lot more feasible than they are. A 5090 or a 4080 can still be used for many more years. I don't see anything wrong with that.

 

[yRaz]

I don't think its a big deal despite what many companies are doing, which is catering to data centers. Current GPUs are fine and so much still can be done with them. This will force developers to get more out of current generation hardware instead of brute forcing their way in. We all know optimizations can go a seriously long way, and with DLSS, frame gen, DLAA, XESS, FSR, upscaling techniques etc. make current generation hardware a lot more feasible than they are. A 5090 or a 4080 can still be used for many more years. I don't see anything wrong with that.

People think it's a big deal because they want to be angry at someone for the current prices of computer parts because it really wasn't all that long ago that we all went through this exact thing with Covid and crypto mining. Lisa-Su just put a big target on herself by saying this, but if you look at their fiancial reports over the last 30 years, most of their revenue comes from the enterprise market. There are some bumps in years when a new XBOX of Playstation gets released, AMD is more than happy to make SOCs for those guys but even that market kind of walks the line between personal computer and enterprise just because of the scale of those sales. I think PC gamers forget that we are the smaller market compared to consoles. And while PC gaming technically posts massively more users, that's a bit of a technicallity. Even with there being 900million PC gamers relative to the consoles 600million, the numbers are a bit off because that includes people playing WoW on the same machine for the last 15 years compared to people who upgrade to the newest console every generation to play the latest games. Console reventue is way higher than PC revenue. So if you want to look at the total addressable market based on revenue, the console market is much bigger than the PC market.