Prime Highlights:
- AMD shares surged over 25% after announcing a strategic partnership with OpenAI.
- OpenAI could acquire a 10% stake in AMD and will deploy up to 6 gigawatts of AMD GPUs over several years.
Key Facts:
- The partnership begins with a 1-gigawatt GPU rollout in the second half of 2026, with further deployments tied to milestones.
- The deal positions AMD as a key supplier for OpenAI, complementing OpenAI’s earlier $100 billion partnership with Nvidia and reducing reliance on a single vendor.
Key Background:
AMD shares jumped over 25% in premarket trading on Monday after the company announced a partnership with OpenAI. As part of the deal, OpenAI could take a 10% stake in AMD, a major move for the chipmaker.
The agreement will have OpenAI use up to 6 gigawatts of AMD Instinct GPUs over several years, starting with an initial 1-gigawatt rollout in the second half of 2026. AMD has issued OpenAI a warrant for up to 160 million shares of common stock, with vesting tied to both deployment milestones and AMD’s share price performance. If fully exercised, the stake could give OpenAI roughly 10% ownership in AMD.
“AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster,” said Sam Altman, CEO of OpenAI. AMD CEO Lisa Su described the partnership as a “win-win” that supports ambitious AI infrastructure plans while advancing the broader AI ecosystem.
The deal makes AMD a key supplier for OpenAI, helping reduce pressure on supply chains and dependence on one company. It adds to OpenAI’s earlier $100 billion partnership with Nvidia, which involved equity and long-term chip supply. While Nvidia provides funding to buy its chips, AMD will now supply GPUs, and OpenAI is also in talks with Broadcom for custom chips.
The partnership shows OpenAI is quickly expanding its AI infrastructure. The company’s Stargate project, which includes operational sites in Texas and ongoing construction in New Mexico, Ohio, and other Midwest locations, is set to integrate a mix of suppliers, including AMD. This cycle of investing, supplying, and demand of AI technology, created by companies, which analysts say is critical, can be weak but vital.
To AMD, the acquisition validates its plans for next-generation Instinct GPUs and enhances its market standing in the competitive AI market that has long been dominated by Nvidia. The alliance is regarded as a significant milestone and a step in the right direction towards the future of AI.
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