OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
AMD to supply six gigawatts of AI chips to OpenAI, which may acquire up to ten percent of AMD via warrants tied to performance
OpenAI and Advanced Micro Devices (AMD) announced today that they have entered into a major multi-year partnership under which AMD will supply AI chips to OpenAI, while granting the latter the option to acquire up to 10 percent of AMD’s shares through warrants.
The agreement is projected to generate tens of billions of dollars in annual revenue for AMD and further intensify competition in the AI hardware sector.
Under the terms of the deal, AMD will deliver “hundreds of thousands” of AI accelerators (GPUs) with a cumulative power capacity of six gigawatts starting in the second half of 2026.
The first deployment will target one gigawatt using AMD’s upcoming Instinct MI450 series, with OpenAI planning to build a dedicated data center facility around that capacity.
AMD expects to begin recognizing revenue from the deployment before the full-scale deployment commences.
As part of the agreement, AMD has issued a warrant allowing OpenAI to purchase up to 160 million shares—roughly ten percent of AMD’s outstanding equity—at one cent per share, contingent on achieving milestone targets.
The first tranche vests upon the initial shipment of MI450 chips.
Additional vesting depends on escalating share-price thresholds for AMD, reaching as high as six hundred dollars per share for the final tranches.
AMD currently has approximately 1.62 billion shares outstanding, and its market valuation is around 267 billion dollars, while its share price closed recently at 164.67 dollars.
AMD leadership described the partnership as a potential “game-changer” for both AMD and the broader AI ecosystem, citing its ripple effects across hardware suppliers and software architecture.
Executives anticipate more than 100 billion dollars in new revenue over the next four years from OpenAI and related customers.
OpenAI’s CEO said the deal will help ensure sufficient infrastructure capacity to meet its scaling needs.
In response to the announcement, AMD’s shares surged sharply in early trading, reflecting investor confidence in the growth prospects ushered in by the deal.
By contrast, shares of competitors experienced minor declines.
Observers see the agreement as a significant strategic bet that positions AMD as a credible challenger to Nvidia’s dominance in AI compute hardware.
The alliance follows a recent non-binding agreement between OpenAI and Nvidia, under which Nvidia committed up to 100 billion dollars and pledged to deliver at least ten gigawatts of compute capacity.
OpenAI is also developing bespoke silicon in partnership with Broadcom, aiming to reduce dependency on external suppliers.
This AMD deal is a key pillar in OpenAI’s broader strategy to diversify and scale its AI infrastructure across multiple chip ecosystems.
The agreement is projected to generate tens of billions of dollars in annual revenue for AMD and further intensify competition in the AI hardware sector.
Under the terms of the deal, AMD will deliver “hundreds of thousands” of AI accelerators (GPUs) with a cumulative power capacity of six gigawatts starting in the second half of 2026.
The first deployment will target one gigawatt using AMD’s upcoming Instinct MI450 series, with OpenAI planning to build a dedicated data center facility around that capacity.
AMD expects to begin recognizing revenue from the deployment before the full-scale deployment commences.
As part of the agreement, AMD has issued a warrant allowing OpenAI to purchase up to 160 million shares—roughly ten percent of AMD’s outstanding equity—at one cent per share, contingent on achieving milestone targets.
The first tranche vests upon the initial shipment of MI450 chips.
Additional vesting depends on escalating share-price thresholds for AMD, reaching as high as six hundred dollars per share for the final tranches.
AMD currently has approximately 1.62 billion shares outstanding, and its market valuation is around 267 billion dollars, while its share price closed recently at 164.67 dollars.
AMD leadership described the partnership as a potential “game-changer” for both AMD and the broader AI ecosystem, citing its ripple effects across hardware suppliers and software architecture.
Executives anticipate more than 100 billion dollars in new revenue over the next four years from OpenAI and related customers.
OpenAI’s CEO said the deal will help ensure sufficient infrastructure capacity to meet its scaling needs.
In response to the announcement, AMD’s shares surged sharply in early trading, reflecting investor confidence in the growth prospects ushered in by the deal.
By contrast, shares of competitors experienced minor declines.
Observers see the agreement as a significant strategic bet that positions AMD as a credible challenger to Nvidia’s dominance in AI compute hardware.
The alliance follows a recent non-binding agreement between OpenAI and Nvidia, under which Nvidia committed up to 100 billion dollars and pledged to deliver at least ten gigawatts of compute capacity.
OpenAI is also developing bespoke silicon in partnership with Broadcom, aiming to reduce dependency on external suppliers.
This AMD deal is a key pillar in OpenAI’s broader strategy to diversify and scale its AI infrastructure across multiple chip ecosystems.
