Microsoft Teams Up with AMD to Power Advanced AI Workloads

Microsoft's latest partnership with AMD is a significant step for the tech company. The deal involves deploying AMD's Helios platform, which includes GPUs, CPUs, networking, and software, to power frontier model inference.

This collaboration showcases Microsoft's confidence in AMD's technology as it will be using the platform for advanced AI models that are considered the most complex and demanding workloads. Frontier AI models require significant computational resources, making AMD's hardware a suitable choice for this application.

The use of AMD's products for inference is also noteworthy as it indicates that Nvidia may not have the cheapest options available in this area. Inference occurs after an AI model has been trained, and having cheaper products can be more important than having the best product in terms of performance.

However, this partnership does come with a challenge for AMD as its stock price has already surged significantly in 2026. The company trades at a premium valuation of 68 times forward earnings, which is higher than Nvidia's valuation of 25 times forward earnings. To justify its current price, AMD needs to deliver strong growth and secure more partnerships.