A Potential Landmark Deal for AMD in the Chinese AI Market

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A significant shift may be underway for Advanced Micro Devices (AMD) in China, a market long constrained by U.S. export controls. Recent reports indicate that Chinese technology leader Alibaba is considering a substantial purchase of tens of thousands of artificial intelligence chips from the semiconductor firm. This move raises a pivotal question: could this strategic deal enable AMD to re-establish a strong presence in the lucrative Chinese market despite Washington's stringent regulations?

The source of renewed market optimism stems from Alibaba's potential order for 40,000 to 50,000 units of AMD's MI308 accelerator. This processor is central to the development. It is a technically modified version of AMD's flagship MI300X, specifically engineered to comply with the exacting export rules set by the U.S. Commerce Department. Should this transaction be finalized, it is projected to generate hundreds of millions of dollars in revenue, providing a notable boost to AMD's crucial data center segment. Market observers interpret this interest as clear evidence that demand for AI infrastructure within China remains a powerful growth driver, undeterred by ongoing geopolitical tensions.

Navigating Costs and Competition

Gaining this market access, however, comes at a price. While AMD CEO Lisa Su confirmed in early December that the necessary export licenses are secured, the company has indicated it will pay a 15% fee to the U.S. government to facilitate these sales. Given the ongoing scarcity of high-performance chips, both AMD and its Chinese clients appear willing to absorb this premium. This situation grants AMD a timing advantage over its key rival. According to industry reports, competitor Nvidia does not plan to launch its compliant H200 chips for China until mid-February 2026—and likely at an even higher government-imposed cost.

Analyst Perspectives and Market Performance

Financial analysts maintain a constructive outlook on AMD's position despite the complex regulatory landscape. Researchers at Rosenblatt Securities highlight that AMD continues to capture server CPU market share from Intel and believe the company can achieve a 50% market share over the long term. Bank of America recently reaffirmed its "Buy" rating on the stock, though it slightly adjusted its price target to $260 to calibrate near-term expectations. Currently, the shares closed at €182.84, trading below the 50-day moving average of €196.30, which reflects recent consolidation pressure in the stock.

The Road Ahead: Confirmation and Financials

For investors, the immediate focus is on an official confirmation of the Alibaba agreement. The next fundamental milestone will arrive on February 3, 2026, with the release of AMD's quarterly earnings. This report is expected to provide clarity on the precise timeline for MI308 chip deliveries and reveal the actual impact of the 15% export fee on the company's gross margins.