AMD's open-source ROCm software gives it free developer labor and faster AI chip development, executives said. Revenue beat estimates at $11.5 billion, but capex nearly tripled to $808 million.
AMD is betting that open-source software will let it overtake Nvidia in the AI chip race. The pitch, made repeatedly on Tuesday's earnings call and in interviews before it, is that freely sharing its code gives AMD access to thousands of outside developers who improve its products for free.
Two AMD executives told Business Insider in July that the company's open-source ROCm software, used to program AI chips, is the key differentiator. ROCm is available for anyone to download, use, or modify. On the earnings call, CEO Lisa Su called ROCm an "inflection point," noting that open-source contributions had increased tenfold in the past year.
"The power of the open source community is just unprecedented," said Kirk Saban, corporate vice president of product, software, and solutions. "You can tap into all of those developers, and they're essentially doing free development work for us."
The strategy targets Nvidia's CUDA software, which runs on its AI chips and is widely seen as a competitive moat. AMD's executives argue that CUDA's closed model limits innovation. By contrast, AMD's open approach lets outside engineers upstream code into AMD's base, accelerating development without direct cost.
Salil Raje, senior vice president of AMD's adaptive and embedded computing group, said the approach is particularly suited to AI agents – software that acts autonomously. "The reason agentic AI works for our platform better than maybe the competitors' platform is because our software is out in the open now," Raje said.
The open-source bet extends beyond AI. Raje said AMD plans to apply the same strategy to physical AI and robotics.
The company's financial results show the stakes. Revenue hit $11.5 billion, beating analysts' expectations. Capital expenditures nearly tripled to $808 million versus the prior year, reflecting the heavy investment needed to compete with Nvidia.
AMD's stock fell 9% in late trading Tuesday after the report, part of a broader sell-off in chip stocks that began in late July. Over the past year, AMD shares have still gained about 193%. Nvidia has risen roughly 20% in the same period.
As companies scramble for compute power to run AI systems, many have added AMD as an alternative to Nvidia. The open-source argument is central to that shift. AMD's Alpha Score sits at 42, labeled Mixed, with the stock trading in the Technology sector.
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