Advanced Micro Devices (XNAS-AMD) has announced a transformative multi year agreement to supply artificial intelligence chips to OpenAI, the creator of ChatGPT. The deal is expected to generate tens of billions of dollars in annual revenue, positioning AMD as a formidable competitor to Nvidia in the AI hardware space.
Under the terms of the agreement, OpenAI will deploy hundreds of thousands of AMD GPUs, equivalent to six gigawatts of computing power, over several years starting in the second half of 2026. The rollout will begin with AMD’s upcoming MI450 series chips, which will power a new one gigawatt facility built by OpenAI.
In a strategic twist, AMD has granted OpenAI a warrant to purchase up to 160 million shares roughly 10% of AMD’s outstanding stock at a nominal price of 1 cent per share. These shares will vest in stages, tied to deployment milestones and AMD’s stock price performance, with the final tranche unlocking if AMD reaches $600 per share.
AMD executives described the deal as a watershed moment for the company and the broader AI industry. Forrest Norrod, AMD’s EVP, called the agreement “transformative,” while strategy chief Mat Hein emphasized its ripple effect across the ecosystem, predicting over $100 billion in new revenue over four years from OpenAI and other clients.
The announcement sent AMD shares soaring over 23% in premarket trading, potentially marking their highest level since March 2024. Analysts estimate AMD’s total revenue for 2025 will reach $32.78 billion, but the OpenAI partnership could significantly exceed those projections. OpenAI CEO Sam Altman said that the deal will help the company build the infrastructure needed to support its next generation AI models. Despite the scale of the AMD partnership, OpenAI will continue working with other providers, including Nvidia, Microsoft, and Broadcom, and is also developing its own custom silicon.