Rackspace Technologies signed a definitive agreement with Advanced Micro Devices on Tuesday for phased deployments of up to 30 megawatts of AMD-based compute power. Separately, in an SEC filing, Rackspace announced a 15% global workforce reduction, with cost savings redirected toward building enterprise AI infrastructure in collaboration with AMD. The moves come as soaring demand for artificial intelligence drives hyperscalers and other companies to aggressively compete in building data center infrastructure, triggering shortages of chips and all-time-high global energy consumption.
Rackspace and AMD Finalize 30-Megawatt Compute Deployment Agreement
Following the signing of a memorandum of understanding in May, Rackspace and AMD entered into a definitive agreement for AMD to provide its GPUs, including MI355X and MI350P, and its EPYC CPUs to power Rackspace's data centers worldwide. Deployments will begin later this year and continue through 2028.
Rackspace said the additional capacity will serve its enterprise customers, especially in the healthcare space, who have expressed early interest in accelerated compute for clinical AI and inference at scale. The companies will also work together to find customers in other industries who need compute for their workloads.
Dan McNamara, senior vice president and general manager of Compute and Enterprise AI at AMD, stated: "By bringing together leadership AMD AI compute solutions and Rackspace's governed cloud operating model, we are helping regulated enterprises deploy high-performance AI infrastructure with the openness, scalability and accountability needed to run AI at enterprise scale."
Rackspace Approves 15% Workforce Reduction to Fund AI Infrastructure
Rackspace's board approved a workforce realignment plan to cut costs and redirect resources from its public cloud business unit, including toward building enterprise AI infrastructure in collaboration with AMD. The company will reduce its global workforce by 15%.
The savings will be reinvested in areas including forward-deployed engineering and AI solutions delivery, according to the company.
Financial Impact: $19 Million Charge and $85 Million Annual Savings
Rackspace will take a one-time charge of up to $19 million for severance payments, healthcare benefits, and other termination-related costs. The workforce cuts will generate up to $85 million in annualized run-rate savings.
FAQ
What is the scope of the Rackspace-AMD compute deployment agreement?
The definitive agreement covers phased deployments of up to 30 megawatts of AMD-based compute power, with AMD providing MI355X and MI350P GPUs and EPYC CPUs to power Rackspace's data centers worldwide starting later this year through 2028.
Why did Rackspace announce a 15% workforce reduction?
Rackspace's board approved the workforce realignment plan to cut costs and redirect resources from its public cloud business unit toward building enterprise AI infrastructure in collaboration with AMD, among other initiatives. The cuts will generate up to $85 million in annualized savings.
