According to Reuters, AMD will supply AI chips to OpenAI over a multi-year period, with the contract covering deployment of hundreds of thousands of units, equivalent to about six gigawatts of compute capacity. OpenAI also has the option to acquire up to 10% of AMD’s equity under the terms of the agreement.

The announcement led AMD’s stock price to surge more than 34%, marking one of its biggest single-day gains in over nine years and adding roughly $80 billion in market value.

Under the deal, AMD expects newly generated revenue of tens of billions annually from AI customers including OpenAI, estimating over $100 billion over a four-year horizon.

Some of the chips will power a one-gigawatt facility slated for 2026, built using AMD’s next-generation MI450 architecture. OpenAI already has other supply arrangements with Nvidia, but this AMD deal widens its hardware sourcing options.

Key Highlights

• AMD to supply hundreds of thousands of AI chips to OpenAI, targeting ~6 GW of compute.

• OpenAI gets option to take 10% stake in AMD under warrant agreement.

• AMD shares jump over 34% on the news.

• Expected multi-year revenue in the tens of billions; AMD projects >$100B over 4 years.

• The deal diversifies OpenAI’s hardware sources beyond Nvidia.

Why This Matters

1. Tightening hardware competition: Nvidia has dominated AI chip supply, but now AMD is making a compelling move into that space.

2. Strategic partnership model: The equity option strengthens alignment between buyer and supplier—blurring the distinction between client and investor.

3. Compute scaling implications: This agreement will help OpenAI scale training and operations capacity more robustly.

4. Market & investment signal: The stock surge illustrates how major infrastructure deals directly influence valuations in tech.

Source
Reuters – Full Article