OpenAI Secures Massive AMD Chip Deal Worth Tens of Billions, Takes Up to 10% Stake in Chipmaker

Key Takeaways

Advanced Micro Devices announced Monday a landmark agreement with OpenAI to supply 6 gigawatts of computing power through multiple generations of its Instinct GPU chips, marking one of the largest deployment agreements in the artificial intelligence industry.

The multi-year deal will see OpenAI deploy AMD's Instinct MI450 series chips beginning with an initial 1-gigawatt rollout in the second half of 2026, with additional capacity scaling up through future chip generations. AMD expects the partnership to deliver tens of billions of dollars in revenue over the coming years.

OpenAI chief executive Sam Altman called the new deal "a major step in building the compute capacity needed to realize AI's full potential. AMD's leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster."

"We are thrilled to partner with OpenAI to deliver AI compute at massive scale," AMD chief executive Lisa Su said. "This agreement creates a true win-win enabling the world's most ambitious AI buildout and advancing the entire AI ecosystem."

AMD chief financial officer Jean Hu added that the deal is "expected to deliver tens of billions of dollars in revenue" for the company.

OpenAI gains significant ownership stake in AMD

As part of the agreement, AMD issued OpenAI a warrant for up to 160 million shares of common stock, structured to vest as specific deployment and performance milestones are achieved. The warrant could give OpenAI up to a 10% ownership stake in the chipmaker.

The shares will vest in tranches tied to multiple conditions, including deployment targets reaching the full 6 gigawatts and AMD achieving certain stock price milestones. The final tranche of shares is set to vest when AMD's stock reaches $600 per share, compared to Monday's closing price of $203.71.

In a joint interview with OpenAI President Greg Brockman, Su explained the financial structure behind the warrant. "The idea is that as OpenAI deploys compute, that's a huge benefit to AMD in terms of the number, the amount of revenue that we get from that," Su said. "Every gigawatt of compute is significant, double-digit billions of revenue to us."

Diversifying beyond Nvidia's dominance

The AMD deal comes just weeks after OpenAI announced a separate $100 billion partnership with Nvidia, the dominant player in AI chip manufacturing. That agreement includes both capital investment from Nvidia and a commitment to supply at least 10 gigawatts of data center computing power.

OpenAI President Greg Brockman addressed the company's multi-vendor approach, emphasizing the critical need for expanded computing capacity.

"We need as much computing power as we can possibly get, and I think the whole industry right now is trying to really adapt to the amount of demand for AI services that we see coming over the next couple of years," Brockman said.

"What we're really seeing is a world where there's going to be absolute compute scarcity, because there's going to be so much demand for AI services and not just from OpenAI, really from the whole ecosystem."

In response to questions about working with multiple chip suppliers, Brockman said: "We have to do this." He added that "building the future of AI requires deep collaboration across every layer of the stack," and working alongside AMD will allow OpenAI to scale to deliver AI tools that benefit people everywhere."

Industry analysts suggest the dual partnerships reflect OpenAI's strategy to avoid over-reliance on a single chip supplier as it races to expand its infrastructure. Media commentator Jim Cramer noted that while Nvidia's stock dipped about 1.5% on the news, the demand for AI computing is large enough for multiple companies to succeed. "In the end — I know this is going to be facetious — I think everybody wins," Cramer said Monday.

Strategic win for AMD in the competitive AI market

For AMD, the OpenAI partnership represents both commercial validation and a significant opportunity to challenge Nvidia's market leadership.

AMD's stock soared 23.71% on Monday, adding approximately $63.4 billion to the company's market capitalization and bringing its total valuation to $330.6 billion.

Su addressed concerns about massive AI investments, dismissing suggestions that the industry may be overextending. "I would say that's probably thinking too small," Su said. "You have to really look at what the power of this technology can do for the world."

Speaking in an interview, Su emphasized the long-term trajectory of artificial intelligence development. "AI is on a 10-year growth path, and at the end of the day, you need the foundational compute to do that," she said.

"You need partnerships like this that really bring the ecosystem together to ensure that, you know, we can really get the best technologies, you know, out there. So we're super excited about the opportunities here."

The deal extends an existing collaboration between the two companies that began with AMD's MI300X chips and includes ongoing technical cooperation to optimize product roadmaps.

AMD claims its upcoming MI450 series will outperform comparable Nvidia offerings through hardware and software improvements developed with OpenAI's input.

Part of OpenAI's trillion-dollar infrastructure push

The AMD agreement is the latest in a series of major partnerships OpenAI has announced as part of its aggressive infrastructure expansion. Combined with the recent Nvidia deal, OpenAI has committed approximately $1 trillion in new buildout spending over the past two weeks alone.

OpenAI is also working with Broadcom on a $10 billion deal to develop custom AI chips, and recently struck agreements with Samsung Electronics and SK Hynix to source memory chips for its Stargate data center project.

The first Stargate facility in Abilene, Texas, is already operational with Nvidia chips, while upcoming sites in New Mexico, Ohio, and the Midwest are expected to feature a mix of suppliers including AMD.

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