OpenAI taps AMD for massive AI chip deal aimed at boosting compute capacity

OpenAI has entered into a significant multi-year agreement with AMD to enhance its AI infrastructure through the deployment of AMD GPUs valued at billions of dollars. This ambitious plan involves the installation of six gigawatts of AMD GPUs, beginning with a one-gigawatt deployment of the AMD Instinct MI450 GPUs set for the latter half of 2026. Sam Altman, CEO of OpenAI, expressed enthusiasm about the collaboration, stating that "AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster." In addition to the GPU deployment, AMD has granted OpenAI a warrant for purchasing up to 160 million shares of its stock, amounting to approximately 10% of the company. This warrant will vest contingent on AMD reaching specific share price milestones as well as OpenAI meeting technical and commercial objectives necessary for large-scale AMD deployments. AMD's executives anticipate that this partnership could generate tens of billions of dollars in annual revenue, projecting over $100 billion in new revenue over the next four years stemming from OpenAI and other clients. Following the announcement, AMD's shares surged by more than 35% in pre-market trading, potentially positioning the stock for its highest opening since March 2024. This collaboration with AMD arrives shortly after Nvidia revealed a strategic partnership with OpenAI, which includes an investment of up to $100 billion aimed at deploying 10 gigawatts of AI data center infrastructure, with the first phase scheduled for 2026. Additionally, reports indicate that OpenAI is exploring the development of its own AI silicon in partnership with Broadcom. The growing demand for large language models (LLMs) has heightened the need for specialized AI chips capable of managing the extensive computational requirements for training and operating these models.