OpenAI Partners with AMD in Massive AI Chip Deal/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ OpenAI and AMD announced a multibillion-dollar partnership Monday to build next-generation AI computing infrastructure. The deal gives OpenAI access to AMD’s upcoming Instinct MI450 chips and an option to acquire up to 10% of AMD’s stock. Analysts say the agreement underscores soaring global demand for AI computing power.
OpenAI-AMD Partnership Quick Looks
- AMD will supply AI chips for OpenAI’s global data infrastructure.
- OpenAI can purchase up to 10% of AMD shares through a performance-based warrant.
- The deal includes 6 gigawatts of computing power, with the first 1 GW online by 2026.
- AMD’s new Instinct MI450 GPU will debut next year as part of the rollout.
- AMD shares jumped 25% premarket, while rival Nvidia dipped slightly.
- OpenAI CEO Sam Altman says AMD’s hardware will “accelerate AI’s potential.”
- Analysts say the deal diversifies OpenAI’s chip supply beyond Nvidia.
- Nvidia and OpenAI also have a $100 billion AI infrastructure partnership.
- Barclays analysts call the AMD deal a “proof point” of massive AI demand.
- The partnership reflects the race for AI compute power amid surging model development.
Deep Look
OpenAI and AMD Announce Strategic Partnership to Power Next-Generation AI Infrastructure
SAN FRANCISCO / SANTA CLARA, Calif. — Semiconductor giant Advanced Micro Devices (AMD) and artificial intelligence leader OpenAI have signed a major supply and investment agreement to collaborate on building global AI computing infrastructure, both companies announced Monday.
Under the deal, AMD will provide high-performance chips to power OpenAI’s “next-generation” artificial intelligence systems. In return, OpenAI will receive a warrant to purchase up to 160 million AMD shares—equivalent to roughly 10% ownership based on AMD’s current 1.6 billion outstanding shares.
The partnership, valued in the tens of billions, underscores the fierce competition for AI chip dominance and marks a key step for OpenAI in diversifying its supplier base beyond Nvidia, which currently dominates the global AI hardware market.
“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” said OpenAI CEO Sam Altman. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring advanced AI capabilities to everyone faster.”
Deal Details and Deployment Timeline
The agreement calls for 6 gigawatts of total computing power—equivalent to the output of several large power plants—dedicated to OpenAI’s infrastructure buildout. The first 1 gigawatt of AMD chips is expected to go online in the second half of 2026.
OpenAI will deploy AMD’s forthcoming Instinct MI450 graphics chips, the company’s most powerful GPU architecture to date, which is slated for release in 2026. The chips are designed to handle massive AI workloads, from large language models like ChatGPT to next-generation generative and multimodal systems.
The AMD stock warrant will vest in stages based on two milestones:
- The amount of computing power AMD successfully delivers to OpenAI.
- Meeting specific share-price targets not publicly disclosed.
Stock Market Reaction and Industry Impact
News of the deal sent AMD shares soaring 25% in premarket trading Monday, signaling investor enthusiasm for the company’s deepening role in the global AI race. Meanwhile, Nvidia’s stock slipped 1.5%, reflecting market recalibration amid the changing AI hardware landscape.
For AMD, the partnership represents its biggest AI breakthrough to date, positioning it as a serious challenger to Nvidia’s dominance. The Santa Clara–based firm has struggled to compete in high-end AI chips but has made major progress with its Instinct GPU line.
“This partnership signals that AMD is finally playing offense in the AI market,” said one industry analyst. “OpenAI’s endorsement gives them immediate credibility at the top tier.”
A Strategic Shift for OpenAI
OpenAI’s move to work with AMD signals a strategic diversification of its hardware sources. The company has relied heavily on Nvidia’s GPUs to power ChatGPT and its commercial API platform, both of which require enormous computational resources.
Last month, OpenAI and Nvidia jointly announced a $100 billion investment to deploy at least 10 gigawatts of data center power, including the installation of Nvidia’s GB200 racks at OpenAI’s flagship “Stargate” data campus in Abilene, Texas.
However, by adding AMD as a key supplier, OpenAI gains supply chain flexibility—a vital advantage amid surging chip demand and global production constraints.
Analyst Reaction: A Proof of Soaring AI Demand
In a note to investors Monday, Barclays analysts said the AMD deal is less about competition with Nvidia and more about the scale of computing power required to meet accelerating AI workloads.
“We realize there will be delays with these deals, and much of the infrastructure doesn’t exist yet,” Barclays wrote. “But this is proof the ecosystem is desperate for more compute.”
The analysts added that the partnership reflects the massive capital investment wave spreading through the AI industry, where infrastructure demands have outpaced hardware production capacity.
Outlook: A New Era for AI Hardware
As AI continues to drive global markets, partnerships like OpenAI’s with AMD mark a shift toward multi-supplier ecosystems designed to secure capacity, lower costs, and accelerate model deployment.
With AI infrastructure now considered a form of “digital energy,” analysts expect similar deals across the industry as tech giants compete to build the foundation for the next generation of AI computing.
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