AMD Shares Surge 25% on Multi-Billion OpenAI AI Chip Deal

Advanced Micro Devices (AMD) has entered a multi-year partnership with OpenAI to supply AI chips, specifically deploying up to 6 gigawatts of AMD's Instinct MI450 GPUs starting in the second half of 2026. This deal positions AMD as a core compute partner for OpenAI, marking a significant strategic win that challenges Nvidia's dominance in the AI semiconductor market. As part of the agreement, OpenAI has been granted warrants to purchase up to 160 million AMD shares, representing about a 10% stake in the company, with vesting tied to deployment milestones and share price targets. The partnership is expected to generate tens of billions of dollars in revenue for AMD over several years, with projections exceeding $100 billion in new revenue over four years from OpenAI and other clients influenced by the deal. OpenAI CEO Sam Altman emphasized that AMD's high-performance chips will accelerate AI innovation and infrastructure buildout, while AMD executives highlighted the transformative nature of the agreement for the company and the broader AI ecosystem. AMD shares surged over 25% following the announcement, reflecting strong investor confidence in the company's growing role in AI technology.