AMD wins massive AI chip deal from OpenAI with stock sweetener

On Monday, Advanced Micro Devices (AMD) revealed a monumental multi-year agreement to supply AI chips to OpenAI, valued at tens of billions of dollars each year. This deal not only underlines AMD's position in the competitive AI chip market but also grants OpenAI the option to buy up to 10% of AMD's stock at just one cent per share, as reported by Reuters. The contract entails the delivery of hundreds of thousands of AMD's AI graphics processing units (GPUs) over several years, beginning in the latter half of 2026. This partnership is a significant endorsement of AMD’s AI hardware and software capabilities, particularly as it strives to challenge Nvidia’s dominance in the sector. AMD executives anticipate that this agreement could lead to over $100 billion in new revenue over the next four years, driven not only by OpenAI but also by other customers inspired by this collaboration. "We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry," stated Forrest Norrod, AMD's Executive Vice President, in an interview with Reuters on Sunday. The financial benefits for AMD are expected to start flowing next year, correlating with OpenAI's plans to construct a one-gigawatt facility that will utilize AMD's upcoming MI450 series chips. Additionally, as part of this expansive deal, AMD will permit OpenAI to acquire up to 160 million shares at the same nominal price of one cent each throughout the duration of the chips contract.