Is AMD’s New AI Alliance with Samsung and Naver a Real Threat to Nvidia?

Advanced Micro Devices AMD -0.14% ▼ is taking steps that could increase competition with Nvidia NVDA -0.70% ▼ , as CEO Lisa Su visits South Korea to expand ties with Samsung Electronics SSNLF +54.05% ▲ and Naver in AI chips.

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AMD already works with Samsung for high-bandwidth memory used in its AI chips. Now, the focus is on something bigger, as AMD looks to use Samsung’s foundry to make future chips.

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During her visit to Korea, Su met Samsung chip head Jun Young-hyun and foundry chief Han Jin-man. The discussions centered on producing AMD’s next-generation AI chips using Samsung’s cutting-edge 2nm and 3nm lines. This could reduce AMD’s reliance on Taiwan Semiconductor Manufacturing Company TSM +1.98% ▲ and help secure more supply as demand grows.

Su also held talks with Naver, South Korea’s top internet company. The two leaders discussed supplying AMD chips for Naver’s massive new data centers, which are designed to support “Sovereign AI” systems for countries that want to manage their own data independently.

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A Clear Step to Compete with Nvidia

The timing of this visit seems to be a clear response to Nvidia’s GTC launch of the Vera CPU. That chip targets the same “Agentic AI” (AI that can reason and take action) workloads where AMD’s EPYC processors currently hold a strong position.

To stay ahead, AMD has committed $250 million to a partnership with Nutanix NTNX +2.79% ▲ to develop an open, enterprise-grade AI platform. By working more closely with Samsung and Naver, AMD is securing the manufacturing capacity and the software partners it needs to offer a complete alternative to Nvidia.

As giants like Meta META -0.76% ▼ and OpenAI look to work with more suppliers, this tie-up between AMD, Samsung, and Naver could offer chips, manufacturing, and AI systems in one place, reducing reliance on a single player like Nvidia.

AMD vs. NVDA: Which Stock Do Analysts Favor?

Turning to the TipRanks stock comparison tool, traders can see which of these two stocks analysts prefer. Nvidia has the higher analysts’ consensus rating at Strong Buy, compared to a Moderate Buy rating for AMD. NVDA stock’s upside potential is also higher at 50.86%, though AMD stock is close behind it with a possible 45.16% upside.

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