During SpaceX’s quarterly earnings call earlier this month on August 4, CEO Elon Musk revealed that the company would drop AMD and exclusively use Nvidia chips for its computation power. Ironically, AMD also had its quarterly earnings report on August 4. While AMD reported stellar growth, the SpaceX news may have overpowered investors. AMD stock price fell by nearly 8% after the announcement. Let’s discuss why Musk may have changed his mind about AMD.

Why Did Elon Musk Chose Nvidia Over AMD For SpaceX?

For Musk, the choice was seemingly simple. The world’s richest person stated that Nvidia’s Vera Rubin architecture is the best available AI computer system. Musk highlighted Nvidia’s superior performance compared to AMD. He also mentioned the deep strategic cooperation between the two companies for SpaceX’s upcoming terrestrial and orbital projects.

SpaceX and Nvidia also announced that the two companies are partnering to design the compute payload for the Starmind AI1 satellite. The satellite will use Nvidia hardware to run heavy AI workload from space. This will mark the first instance of an AI chip manufacturer going into space.

Is AMD Out Of The AI Race?

Nvidia is the clear leader in the AI chip manufacturing sector, but an endorsement from Elon Musk is no small thing. Moreover, SpaceX is pushing the frontiers in space travel. Nvidia is set to play a key role in the company’s future.

Moreover, Nvidia recently announced a strategic partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR. The partnership aims to mobilize $500 million in third-party capital to build AI infrastructure.

Also Read: Nvidia Stock Can Easily Outperform META: Here’s Why

While AMD may be falling behind, the company has made substantial innovation to bring more competition to the game. AMD recently revealed its Helios chips which the company claims can outperform Nvidia. We could see a change in AMD’s client list if the chips are as powerful as they claim.