Discussion Nvidia is widening the R&D gap with its competitors

[marees]

Imo, some good points here:
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AMD's cashflow is not particularly high at the moment(1.9 billion vs 25 billion in revenue) and something like 500 million in additional R and D quarterly would negatively affect their stock by turning their quarters into losses. Also their cash pile is not particularly large at the moment at 4.5 billion. So overspending as you mentioned could turn their fortunes into misfortunes quite quickly as you implied. Keeping their stock high is very important to AMD and this year has not been good to AMD in this regard(peak of 210 vs 125 now with AMD reaching a 52 week low recently).

At this point, AMD wants to prop up their stock price by making their financial look healthier(hence the layoffs and shuffling of resources). At this point AMD is likely saving any cash on hand for things like financing the purchase of an AI startup buyout or something like that.

Compare this to Nvidia's 55 billion and it's truly pretty poor gamble considering Nvidia's crazy cashflow at the moment which are among the best in the industry(70 billion in net profit this year vs 120 billion plus in revenue if you include the upcoming quarter).

AMD retreat from the highend is a sign of the times with how expensive it is to produce videocards in terms of cost to produce along with R and D expenditure. It's not a growing market either which does not really justify further investment. People expecting AMD to do what is best for them and not what is best for AMD just shows how delusional some buyers are.

Looking at this thread and the Intel battlemage thread, people expect companies without boatloads of money to sell cards at cost or a loss in the name of marketshare or bring up bogus data(TSMC is not giving Intel a 40% discount when their margins are 57% and their captital expenditure is 35 billion annually[more likely a rumor to help get Pat fired]) to create the illusion you can make relatively large dies graphic card at 250 dollars and still make a profit even though cost of production of silicon has quadrupled vs 10-12 years ago.