Advanced Micro Devices Inc. (AMD) has announced a landmark partnership with OpenAI to deliver large-scale artificial intelligence infrastructure — a move the chipmaker says could generate tens of billions of dollars in new revenue.
The deal sent AMD shares soaring 26% to $207, while Nvidia Corp., its biggest rival in the AI chip space, fell 1.6% in premarket trading.
Under the agreement, OpenAI will deploy 6 gigawatts of AMD graphics processing units (GPUs) over multiple years, according to a joint statement issued Monday.
AMD has also granted OpenAI a warrant for up to 160 million shares, which will vest as milestones are achieved.
These include both stock price targets — with one tranche tied to AMD’s share price reaching $600 — and progress in rolling out the new computing capacity.
AMD shares closed Friday at $164.67.
The deal underscores the growing demand for high-performance chips needed to power the next generation of AI tools, from language models to generative systems.
The deployment, set to begin in the second half of next year, will use AMD’s Instinct MI450 chips, with additional phases tied to technical and commercial milestones.
Rivalry with Nvidia intensifies
The partnership comes as AMD seeks to secure a stronger foothold in a market long dominated by Nvidia, whose GPUs have become the industry standard for training and running artificial intelligence software.
Nvidia’s data center division alone generated $115 billion in sales last year — more than the total annual revenue of any other chipmaker — and continues to grow at a rapid pace.
In September, Nvidia announced its own $100 billion investment in OpenAI to build new data centers with a total capacity of 10 gigawatts, roughly equivalent to the peak electricity demand of New York City.
AMD’s latest agreement ensures it remains a central player in the expanding AI infrastructure landscape and offers a pathway for its AI GPU revenue — projected at $6.55 billion this year — to rise dramatically in the coming years.
AMD executives said the partnership could eventually lift revenue from AI chips above $100 billion, although they did not provide a specific timeline.
Chief Executive Officer Lisa Su described the collaboration as a milestone for the company, saying AMD is “thrilled to partner with OpenAI to deliver AI compute at massive scale.”
OpenAI CEO Sam Altman added that AMD’s “leadership in high-performance chips” would help accelerate the rollout of AI technology worldwide.
Financial and strategic implications
AMD Chief Financial Officer Jean Hu said the agreement is expected to deliver “tens of billions of dollars in revenue” while driving earnings per share growth.
She added that the deal creates “significant strategic alignment” between the two companies, as both aim to expand global AI computing capacity.
For OpenAI, the collaboration diversifies its supplier base, reducing reliance on Nvidia’s technology and potentially strengthening competition in the AI hardware market.
However, the partnership also places both companies at the center of a growing debate about whether the massive capital spending on AI infrastructure can be justified or sustained over time.
The first tranche of warrants will vest once the initial gigawatt of AMD-powered computing comes online, marking a major step in AMD’s bid to capture a larger share of the AI accelerator market.
As global demand for compute power surges, the AMD-OpenAI alliance highlights both the opportunities and the risks of the race to build the world’s next generation of artificial intelligence infrastructure.
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