AMD Scores Big AI Chip Deal with OpenAI, Stock Surges

Advanced Micro Devices (AMD) has emerged as a key player in the artificial intelligence arena, securing a major partnership with OpenAI. This deal sent AMD's stock soaring and highlights the intensifying competition in the AI chip market.

AMD will supply its Instinct series GPUs to power OpenAI's next-generation AI infrastructure. The initial deployment of 1 gigawatt of AMD Instinct MI450 GPUs is slated for the second half of 2026, mirroring the timeline of Nvidia's deal with OpenAI.

Importantly, AMD has granted OpenAI a warrant for up to 160 million shares of AMD stock. This is structured to vest as specific milestones are achieved.

The potential inflow of cash from OpenAI's investment could be substantial. Before the deal, AMD's market capitalization hovered around $267 billion; 10% of that is $26.7 billion.

AMD's CFO, Jean Hu, anticipates the partnership will generate tens of billions of dollars in revenue. Also, it should significantly boost AMD's earnings per share.

The partnership underscores the escalating race to advance AI capabilities. Deals like these could accelerate the development of artificial general intelligence (AGI) and artificial superintelligence (ASI).

Nvidia and AMD are set to be major beneficiaries as companies rush to acquire more AI-enabling GPUs.