ChatGPT creator inks multibillion-dollar deal for 6 gigawatts of AI computing power, challenging Nvidia's dominance.
Advanced Micro Devices shares soared 24% on Monday following the announcement of a landmark partnership with OpenAI that could see the artificial intelligence company acquire up to 10% ownership in the chipmaker through a massive GPU deployment agreement.
The deal, which AMD said could generate tens of billions of dollars in annual revenue, positions the Santa Clara-based semiconductor manufacturer as a core strategic partner to OpenAI and marks one of the largest GPU deployment agreements in AI industry history. AMD's market capitalization surged by $63.4 billion, bringing its total valuation to $330.6 billion—exceeding household names like Coca-Cola, General Electric, and Chevron.
Historic Chip Deployment Agreement
Under the multi-year, multi-generation agreement announced Monday, OpenAI will deploy 6 gigawatts of AMD Instinct graphics processing units to power its next-generation AI infrastructure. The first 1 gigawatt deployment of AMD's Instinct MI450 GPUs is scheduled to begin in the second half of 2026.
"This partnership is a major step in building the compute capacity needed to realize AI's full potential," said Sam Altman, co-founder and CEO of OpenAI, in a press release. "AMD's leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster."
As part of the arrangement, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock. The warrant includes vesting milestones tied to both deployment volume and AMD's share price, with the first tranche vesting upon the initial full gigawatt deployment. If OpenAI exercises the full warrant, it could acquire approximately 10% ownership in AMD based on current shares outstanding.
Addressing Critical Compute Shortage
OpenAI President Greg Brockman emphasized the urgency behind the partnership during an appearance on CNBC's "Squawk on the Street," revealing the extent of the company's compute constraints.
"We have to do this," Brockman said. "This is so core to our mission if we really want to be able to scale to reach all of humanity, this is what we have to do." He added that OpenAI is currently unable to launch many revenue-generating features in ChatGPT and other products due to insufficient computing power.
"Building the future of AI requires deep collaboration across every layer of the stack," Brockman stated in AMD's official announcement. "Working alongside AMD will allow us to scale to deliver AI tools that benefit people everywhere."
Breaking Nvidia's Stranglehold
The AMD partnership arrives less than two weeks after OpenAI announced a separate $100 billion equity-and-supply agreement with Nvidia, which will provide 10 gigawatts of computing capacity. However, in a notable difference, Nvidia took an ownership stake in OpenAI rather than the reverse arrangement with AMD.
For AMD, the deal represents both commercial validation and a strategic breakthrough after years of trailing Nvidia in the AI accelerator market. The company now has a flagship customer at the forefront of the generative AI revolution.
"We are thrilled to partner with OpenAI to deliver AI compute at massive scale," said Dr. Lisa Su, chair and CEO of AMD. "This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world's most ambitious AI buildout and advancing the entire AI ecosystem."
Su told CNBC that AI is on a 10-year growth trajectory and emphasized the need for foundational partnerships. "You need partnerships like this that really bring the ecosystem together to ensure that we can really get the best technologies out there," she said.
Nvidia shares fell 1% on Monday following news of the OpenAI-AMD deal, reflecting investor concerns about increasing competition in the AI chip market.
The arrangement between OpenAI and AMD exemplifies the increasingly circular nature of AI's corporate economy, where capital, equity, and computing power are traded among the same small group of companies building and powering the technology.
Nvidia is supplying capital to buy its own chips. Oracle is constructing data center sites. AMD and Broadcom are stepping in as alternative chip suppliers. OpenAI anchors the demand driving this ecosystem forward.
