Nvidia and AMD are in their AI era, and gamers can do nothing but watch

Summary

• Nvidia has little reason to fast-track its RTX 5000 launch or to focus on producing great GeForce GPUs instead of AI chips.
• AMD is also raking in 90% of its revenues from data center chips, and is fine with delaying the RX 8000 to 2025.
• Shareholders dictate the shift from gaming GPUs to AI chips, limiting the influence of gamers in the market.

At this point, it's hardly news to anyone that AI is the predominant technology trend across industries and geographies. Companies like Nvidia have been at the epicenter of the AI wave, and have naturally profited the most from supplying data center GPUs to Big Tech and beyond. More recently, Nvidia's biggest competitor in the GPU space, AMD, has been following the same trajectory as Team Green.

Riding the AI wave has been highly beneficial for Nvidia and AMD, but it has been less than ideal for gamers around the globe. It seems the writing is on the wall — especially considering the latest developments — as both Nvidia and AMD have put gaming GPUs on the back burner. There seems no end in sight for this "AI era" of GPU manufacturers, and as gamers, all we can do is watch from the sidelines.

Nvidia has no plans to re-focus on gaming GPUs

Always follow the money

Earlier this year, when Nvidia announced its financial results for the first quarter, it was clear that its data center revenue formed the overwhelming chunk of its income. Compared to a measly $2.6 billion brought in by its gaming vertical, its revenue thanks to AI was a whopping $22.6 billion. When the company announces the second quarter results later this month, I expect the AI revenue share to increase even more.

With all its resources and silicon allocation focused on yearly AI chip releases, there might not be much room left to produce half-decent GeForce GPUs.

While it was clear Nvidia had put gaming GPUs on the back burner, the company's decision to release new AI GPU architectures every year further spelled out doom for gaming GPUs. With all its resources and silicon allocation focused on yearly AI chip releases, there might not be much room left to produce half-decent GeForce GPUs.

And with the latest rumors that Nvidia might not launch its RTX 5000 gaming GPUs until next year, it feels like that may be the final nail in the coffin. Previously expected to come out in late 2024, the delayed launch seems to be, in part, due to Nvidia's priority being the Blackwell AI chips. This points to the company's increasingly cold attitude towards gaming products.

With no competition at the high-end, and little reason to allocate resources to gaming GPUs over AI chips, Nvidia seems pretty confident in continuing its AI-focused strategy.

Furthermore, Nvidia is certainly in no rush to cross the finish line first with its RTX 5000 GPUs, considering that AMD is widely rumored to not rally in the high-end GPU segment this year. With no competition at the high-end, and little reason to allocate resources to gaming GPUs over AI chips, Nvidia seems pretty confident in continuing its AI-focused strategy.

AMD is unsurprisingly following in Nvidia's footsteps

Rising demand for AI chips made it inevitable

To no one's surprise, AMD's second-quarter financial results showed a nearly 50% revenue share for its data center segment at $2.8 billion (a 155% increase over last year), with gaming bringing in only 11% at $648 million, down 59% year-over-year. The percentage share of the gaming revenues is eerily similar to that of Nvidia, as AMD capitalizes on the rapidly growing demand for AI chips.

It now seems that, just like Nvidia, AMD isn't too concerned about the gaming vertical, content raking in the big bucks thanks to the data center segment.

In addition to the company not competing in the high-end gaming GPU segment, latest rumors suggest that the RX 8000 series launch will also be delayed to 2025. CES seems to be the most likely window for the next-gen gaming GPU launches from both Team Green and Team Red. Earlier reports indicated that AMD might one-up Nvidia by fast-tracking its launch, and capture the wide open "late 2024" window.

However, it now seems that, just like Nvidia, AMD isn't too concerned about the gaming vertical, content raking in the big bucks thanks to the data center segment.

Shareholders, not gamers, have all the power

Vote with your wallet? There's no election

A popular adage in the PC hardware community is "Vote with your wallet." While that might have worked in the past, you can be sure that it isn't going to move the needle now. Both Nvidia and AMD have all but announced their intentions to focus their energies on data center GPUs, with gaming GPUs being relegated to an afterthought. Nvidia will sell its high-end RTX 5000 cards at arbitrary prices, as it knows that people will buy them, no matter what.

Poor GPU launches seem to be becoming the norm rather than the exception, and I believe this will continue in the upcoming generation.

AMD might attempt to capture the mid-range segment by undercutting Nvidia, but I'm not holding my breath for any crazy gen-on-gen improvements. Poor GPU launches seem to be becoming the norm rather than the exception, and I believe this will continue in the upcoming generation. When the shareholders need to be pleased by keeping the AI billions flowing, gamers hardly have any say in the game anymore.

It's the end of an era, and the beginning of a new one

No one can (or should) blame companies for chasing their most profitable business lines, but when it comes at the cost of other segments, alarm bells start ringing. Recent developments seem to be pointing to a universal shifting of focus away from gaming GPUs toward AI chips. This might exacerbate the prevailing issues in the market — poor value for the money, lack of decent budget options, and lack of innovation.

No one can say how long this trend will continue, but gamers are probably not going to be the focus segment for Nvidia or AMD for the next few years at least.