OpenAI and AMD Forge Multi-Gigawatt AI Chip Supply Partnership with Equity Stake Option
OpenAI and AMD have signed a multiyear AI chip supply partnership, including an option for OpenAI to acquire a 10% stake in AMD, significantly impacting the AI infrastructure landscape and market dynamics.
- • OpenAI will purchase 6 gigawatts of AMD Instinct MI450 GPUs, starting with 1 gigawatt deployment in late 2026.
- • OpenAI has a warrant enabling acquisition of up to 10% of AMD shares based on performance milestones.
- • AMD shares surged over 23% following the partnership announcement, reflecting market approval.
- • The deal could yield tens of billions in annual revenue for AMD and intensifies competition with Nvidia in the AI chip market.
Key details
OpenAI has entered into a landmark multiyear partnership with semiconductor giant AMD to secure large-scale AI chip supply aimed at significantly boosting its AI infrastructure. The deal involves OpenAI purchasing a total of 6 gigawatts of AMD Instinct MI450 GPUs over the coming years, with an initial deployment of 1 gigawatt planned to be operational in the second half of 2026. OpenAI's CEO Sam Altman highlighted that the cutting-edge AMD chips will accelerate AI advancement by enabling massive compute capacity required for next-generation AI models.
As part of the agreement, OpenAI received a warrant allowing it to acquire up to 160 million shares of AMD—equivalent to roughly a 10% ownership stake—contingent on AMD meeting performance targets. This unique equity component signals a deep strategic alignment between the parties beyond supply-only terms. AMD CEO Lisa Su expressed enthusiasm over working closely with OpenAI to drive AI compute capabilities and forecasted the deal could generate tens of billions of dollars in annual revenue for AMD.
Market reaction was swift: AMD's shares surged between 24% and over 30% across reports immediately after the announcement, breaking through prior consolidation. In contrast, NVIDIA, the longstanding dominant player with a 70% AI chip market share, saw a slight stock dip amid growing competition. Industry analysts from Barclays and William O'Neil + Co. emphasized that the partnership underscores an urgent industry-wide need to expand AI computing resources, potentially reshaping AI hardware supply chains given OpenAI's concurrent deals with suppliers such as Broadcom, Nvidia, and Oracle.
OpenAI's commitment to building extensive AI infrastructure is backed by a current valuation of $500 billion and has included plans for spending $100 billion alongside other investors to develop AI capacity in the U.S. This AMD deal aligns with OpenAI's broader "Stargate" project slated to inject $500 billion over four years to scale AI innovation. Despite enthusiasm, some market watchers voice concern about OpenAI's approach to financing this vast infrastructure given the nascent stage of many AI applications and lack of current profitability.
This agreement not only elevates AMD's profile as a formidable AI chip supplier but also marks a strategic milestone in the industry's next phase of compute power expansion, signaling intensifying competition and diversification beyond NVIDIA's dominance.