Market AnalysisJul 21, 20262 Min

AMD ready to take on Nvidia with Microsoft by its side

Semiconductor company Advanced Micro Devices (AMD) shook up the artificial intelligence (AI) market on Monday with the launch of its first-ever AI rack server platform, Helios.

AMD earlier operated solely as a component chip vendor. The launch of the AI rack server platform Helios will help the company offer a fully integrated AI infrastructure system — combining graphic processing units (GPUs), central processing units (CPUs), networking and software.

Two factors that made the Helios launch grab attention were the potential rivalry it will start with Nvidia and the early-stage support it got from Microsoft.

AMD on Monday said that Helios was among the firsts to compete with Nvidia’s rack-scale AI systems that command over 95% of the data center GPU market.

Its launch threatens Nvidia’s monopoly in the space as large buyers would now evaluate AMD’s Helios alongside existing Nvidia rack offerings.

AMD’s deal with Microsoft

The launch of Helios gained traction as soon as AMD followed it up with an announcement that Microsoft will deploy the rack-scale AI system on Azure to power frontier model inference for Microsoft, its AI customers, and Azure AI services.

AMD said that it expected to deliver Helios to Microsoft and other customers before the end of 2026.

Microsoft’s support is significant as it joins a growing list of companies that have made deployment or commitment to adopt the Helios system, fueling AMD’s confidence. These include Meta, OpenAI, Oracle, and India’s Tata Consultancy Services (TCS).

In February this year, Meta had committed to deploying as much as 6 gigawatts of AMD GPUs over time, with an initial 1 gigawatt slated for Helios racks this year.

On Monday, Microsoft chairman and CEO Satya Nadella too reiterated his belief in the strategic partnership with AMD by saying: “We are expanding the Azure infrastructure portfolio with AMD Helios to give customers the performance, scale and choice they need to build and run the next generation of AI applications.”

Can Helios change the game for AMD?

AMD on Monday hinted that entry in the rack server market could trigger the next cycle of growth for the company.

“The AI industry has historically focused on individual components: CPUs, GPUs, networking devices, and software frameworks. But as AI models scale and enterprise adoption accelerates, infrastructure performance increasingly depends on how all those elements work together. That is why AMD is taking a system-level approach,” it said.

The company said it anticipated generating tens of billions of dollars in data center AI revenue from 2027 onward, with Helios expected to be the primary driver.

In the first quarter of 2026, AMD’s data center segment posted $5.78 billion in revenue, up 57% from the year-ago period.

Following the launch of the Helios AI system, shares of AMD closed 1.58% higher on Monday at $503.57.