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AMD announced it has landed Baidu as a customer and partner. It’s a significant win for AMD; Baidu doesn’t really have a US presence, but it controls 76 percent of the PC search market in China and 82 percent of the mobile and tablet markets.

Specifically, Baidu is opting to adopt single-socket Epyc servers. AMD currently offers a range of single-socket CPUs, from the Epyc 7601 (32 cores, 2.2GHz base, 3.2GHz turbo) to the Epyc 7251 (8 cores, 2.1GHz base, 2.9GHz turbo). Reviews of Epyc have generally been favorable — the CPU doesn’t always beat Intel but it competes far better than anything AMD has had in-market since Interlagos launched in September, 2011.

Baidu is using AMD CPUs for AI, big data, and cloud computing services, with additional data center expansions beginning in Q1 2018.

How is AMD’s Server Ramp Going?

When AMD announced its new server brand (Epyc) and architecture, it was extremely clear about not expecting a quick server ramp. Despite reiterating this point at multiple quarterly calls and events, some investors still punished the stock for not ramping servers more quickly, raising the question of whether analysts ever bother to research the companies they cover.

Evaluated against AMD’s own stated goal of a slow ramp, AMD appears to be doing quite well. It’s announced deals with Microsoft and Baidu, two of the top eight cloud service/hyperscale providers. NextPlatform identifies these as Amazon, Facebook, Google, and Microsoft in the US and Alibaba, Baidu, China Mobile, and Tencent in China. Baidu is standardizing on AMD’s single-socket systems, which tend to be cheaper than their Xeon equivalents while containing 128 PCIe lanes — far more than Intel provides in an equivalent configuration. AMD still doesn’t expect its server business to be a major profit driver in 2018, but these early wins could foreshadow larger long-term achievements.

People sometimes forget AMD’s original server ramp didn’t begin in Q2 2006, with AMD seizing 20 percent of the server market by Q1 2007. AMD began ramping its server processors with the launch of Athlon MP in early 2001. Opteron launched in June 2003, and AMD started really picking up steam with the launch of dual-core Opterons in the spring of 2005. AMD’s slow and careful ramp into hyperscale data centers reflects the intrinsic conservative nature of server vendors, and the steady pace of a company that doesn’t have terribly deep pockets but is making progress nonetheless.

If Baidu and Microsoft find AMD has built an equally good-or-better product (for various definitions of better), they’ll likely invest more in Epyc servers, which indirectly encourages other companies to do the same thing. If you’re hoping to see signs of progress for AMD’s server chips, don’t watch quarterly numbers at this point. Focus on long-term deals, agreements, and trends instead.