You might be surprised that a company named Advanced Micro Devices (AMD) primarily generates its profits from high-end graphic cards. However, despite the strong business from gaming hardware, demand from data centers dealing with AI has overshadowed this segment in recent years.

In its latest earnings call, AMD disclosed that revenue from the data center business surged, now contributing approximately 50% of its total annual revenue in 2024. According to Jean Hu, ARM’s EVP and CFO, AMD reported a record revenue of $25.8 billion, attributing this success to a 94% growth in their data center division.

Gaming isn’t performing as well, experiencing a 59% decline in revenue year-over-year, with Lisa Su, AMD’s CEO, highlighting that revenues from semi-custom console chips, which power platforms like PlayStation and Xbox, have fallen as companies like Microsoft and Sony focus on clearing inventory.

Overall, these findings showcase a critical shift within AMD as gaming hardware takes a backseat to rising demands for data centers, creating an opportunity for growth in AI-related sectors.