Advanced Micro Devices (AMD) is in advanced talks to supply 10,000 of its MI355 AI accelerators to South Korean AI startup Upstage, marking a potential strategic win in a region dominated by Nvidia. The discussions, confirmed by Upstage CEO Sung Kim after a meeting with AMD CEO Lisa Su in Seoul, are part of Upstage's strategy to diversify its AI chip supply away from Nvidia.
Upstage is a key participant in a state-backed competition, nicknamed the "AI Squid Game," overseen by South Korea's Ministry of Science and ICT to build the nation's top AI model. The company is developing a large language model with approximately 200 billion parameters for a summer evaluation round, a compute-intensive task that requires significant hardware. Securing AMD chips would provide necessary capacity while reducing reliance on a single supplier. Upstage is also targeting international "sovereign AI" expansion in markets like the UAE and Vietnam.
Concurrently, Nvidia faces a significant supply chain hurdle for its next-generation Feynman AI platform, scheduled for 2028. Reports indicate that Taiwan Semiconductor Manufacturing Company's (TSMC) advanced 2-nanometer production capacity is fully booked until 2028 and potentially beyond due to overwhelming demand from AI and high-performance computing clients, including Meta and Apple. This capacity crunch may force Nvidia to redesign the Feynman architecture. Nvidia's stock fell 3.28% on the news, while TSMC's dropped 2.82%.
Nvidia's nearer-term Vera Rubin platform remains on track for shipment later this year. Despite the supply challenges, analyst sentiment for Nvidia remains strongly positive, with a consensus Strong Buy rating and an average price target of $274.03. AMD stock was down approximately 1.92%, with a Moderate Buy consensus and an average price target of $284.96.
