On Tuesday, Advanced Micro Devices (AMD.US) entered into an agreement with AI infrastructure solutions provider Rackspace Technology (RXT.US) for the phased deployment of an initial 30 megawatts (MW) of AMD AI computing resources. In pre-market trading on Tuesday, shares of Rackspace surged as much as approximately 27%, and were up 21.39% to $7.16 at the time of reporting.
The deployment is scheduled to commence in late 2026 and continue through 2028, covering Rackspace's global data centers. This agreement implements the memorandum of understanding announced by the two companies last month.
The companies stated that once fully deployed, the 30 MW of dedicated AMD compute resources will create significant service capacity to meet the needs of regulated enterprise workloads. This includes healthcare providers, who have shown early interest in accelerated computing for clinical AI and large-scale inference.
The collaboration integrates AMD Instinct graphics processors (GPUs, including the MI355X, MI350P, and future follow-on solutions) with AMD EPYC CPUs into a unified enterprise-grade AI cloud architecture.
The parties noted that the agreement will accelerate the delivery of the four integrated capabilities announced with the memorandum: Enterprise AI Cloud, Enterprise Inference Engine, Inference as a Service, and Bare Metal AMD Instinct. This provides a complete, controlled technology stack ranging from bare metal compute to fully managed inference.
Dan McNamara, Senior Vice President and General Manager of Compute and Enterprise AI at AMD, commented: "By combining industry-leading AMD AI compute solutions with Rackspace's controlled cloud operating model, we are helping regulated enterprises deploy high-performance AI infrastructure. This also provides the openness, scalability, and accountability required to run AI at enterprise scale."
Both companies plan to commit sales and marketing resources to identify and engage enterprise customers.
Workforce Restructuring at Rackspace
In a separate announcement, Rackspace indicated it will undertake a workforce restructuring expected to reduce its global headcount by approximately 15%. The company stated that most affected employees were notified around June 10th, with the remaining staff separations to occur over the next six months depending on role and jurisdiction.
Rackspace noted that its Board Executive Committee approved this workforce restructuring plan on June 10th. The company attributed the adjustment primarily to its strategic decision to de-emphasize certain traditional service delivery functions (mainly within the Public Cloud business unit) and optimize geographically. This is to redeploy resources toward building out its enterprise AI capabilities.
Rackspace anticipates this workforce restructuring will generate approximately $14 million to $19 million in one-time charges, the majority of which are expected to be incurred within 2026. Upon full implementation, compared to current spending levels, the company expects to achieve annualized operating cost savings of roughly $75 million to $85 million.
The company stated it plans to reinvest a significant portion of these expected savings into its highest-growth product and service areas, including cutting-edge engineering deployments, AI solution delivery, and enterprise AI infrastructure build-out.
Rackspace added that as it continues to evaluate opportunities for operational optimization, it may take additional actions while advancing its strategic transformation.
Comments