OpenAI partners with AMD for AI chips, can take 10% stake

Advanced Micro Devices (AMD) secured a landmark deal, signing a multi-year agreement to supply artificial intelligence chips to OpenAI.

The partnership reshaped the AI hardware landscape as it included an option for the AI giant to acquire a 10% stake in the chipmaker.

This announcement was made on Monday, October 6, outlining the implementation of six gigawatts of AMD's AI graphics processing units (GPUs), starting with the upcoming MI450 line in the second half of 2026.

The deal was called revolutionary by AMD executives, who projected that tens of billions of dollars in revenue would be generated annually, and that the new revenue would reach hundreds of billions of dollars in four years, once the ripple effect on the industry is calculated.

To solidify the strategic fit, AMD has granted OpenAI a warrant to acquire up to 160 million shares of its stock. This stake will hold approximately 10% of the company, and it will require certain milestones to be met, such as the share value of AMD reaching as high as $ 600 per share.

The collaboration is a strong validation of AMD's capabilities to compete with market leader Nvidia and offer OpenAI a diversified and essential supply of computing power in its massive AI infrastructure construction.

This news propelled the shares of AMD by over 1% market trading, which represents a significant shift in market dynamics and places AMD at the forefront in AI chips.