OpenAI Teams Up With AMD to Boost AI Computing Power
Source: apnews.com
OpenAI is diversifying its chip suppliers to meet the ever-growing demands of artificial intelligence. The ChatGPT maker is partnering with AMD to bolster its AI infrastructure.
New Chip Partnership
AMD will supply its high-performance graphics chips to OpenAI. The deal aims to enhance OpenAI's computing resources, essential for AI development.
OpenAI has the option to acquire up to a 10% stake in AMD. This is according to a joint statement that announced the new partnership.
Details of the Agreement
OpenAI will purchase AMD's Instinct MI450 chips, expected next year. The agreement includes 6 gigawatts of computing power for OpenAI's next-gen AI.
The initial batch of chips, worth 1 gigawatt, should be deployed by the second half of 2026. AMD issued OpenAI a warrant to buy 160 million AMD shares.
Financial Implications
The warrant depends on computing power deployment and share-price targets. AMD's shares jumped nearly 24% upon the announcement. Nvidia's shares, which have been soaring, dipped by 1%.
OpenAI's CEO, Sam Altman, emphasized the importance of the partnership. He stated that AMD’s chips would accelerate the advancement of AI.
Market Dynamics
The deal is a significant win for AMD, playing catch-up with Nvidia. It also signals OpenAI's strategy to reduce reliance on Nvidia.
The AI boom has significantly increased demand for Nvidia's chips. Last month, OpenAI and Nvidia announced a $100 billion partnership for data center computing power.
Industry Perspective
Barclays analysts suggest the deal reflects the massive computing needed for AI. They noted the ecosystem's urgent need for more computing resources.