AMD bets on AI-powered PCs as artificial intelligence race with Nvidia, Intel heats up
SHANGHAI, CHINA - JULY 28, 2023 - Photo taken on July 28, 2023 shows the AMD logo at the 2023 ChinaJoy in Shanghai, China.

U.S. chip giant Advanced Micro Devices is betting on AI PCs to take on rivals including Nvidia and Intel as the AI race heats up.

"[The market for] AI PCs is going to continue to expand," said Victor Peng, president of AMD, in an exclusive interview with CNBC on Thursday. He added that the firm expects more adoption of AI PCs in the second half of the year.

These are personal computers embedded with processors specifically designed to perform AI functions such as real-time language translation.

Tech research firm Canalys in a December report said the boom in generative AI is expected to boost PC sales as consumers are seeking devices with AI features, predicting that 60% of the PCs shipped in 2027 will be AI-capable.

An explosion of interest in AI was sparked by the launch of ChatGPT in November 2022 as the chatbot went viral for its ability to generate human-like responses to users' prompts.

HP president and CEO Enrique Lores said on the fourth-quarter earnings call in November that the firm was "really excited about the impact that AI PCs are going to have in the overall PC category" but it would "take some time" before it penetrates deep into the market.

Initially, AI-powered devices would be targeted at some segments of the enterprise PC market, but more use cases and cost reductions could spread their deployment to the broader market over time, according to research firm International Data Corporation.

IDC expects the integration of AI capabilities into PCs to serve as a catalyst for upgrades, hitting shelves this year.