AMD Signs AI Chip Supply Deal with OpenAI, Giving the ChatGPT Maker Option to Take a 10% Stake
Advanced Micro Devices (AMD.O) announced on Monday that it has signed a multi-year agreement to supply artificial intelligence (AI) chips to OpenAI, a deal expected to generate billions of dollars in annual revenue for the chipmaker. As part of the agreement, OpenAI will have the option to acquire up to a 10% stake in AMD.
The partnership marks a major endorsement of AMD’s AI chips and software and offers OpenAI an opportunity to invest in Nvidia’s strongest rival in the AI hardware space. AMD shares surged more than 23% in premarket trading following the announcement.
“We see this deal as transformative—not only for AMD, but for the entire industry,” said Forrest Norrod, AMD’s executive vice president, in an interview with Reuters on Sunday.
Under the agreement, AMD will deploy millions of AI chips, equivalent to six gigawatts of computing power, over several years beginning in the second half of 2026. OpenAI will start building a one-gigawatt facility next year using AMD’s upcoming MI450 series chips, with revenue generation expected to begin at the same time.
AMD executives project billions in annual revenue from the deal and estimate that, over four years, the company could gain more than $100 billion in new business from OpenAI and other clients.
“This partnership will set a precedent,” said Matt Hein, AMD’s chief strategy officer. “Others will follow because this is truly groundbreaking—an industry leader shaping the broader ecosystem.”
OpenAI CEO Sam Altman said the agreement will help the company build the AI infrastructure needed to meet its growing computational demands.
According to LSEG data, analysts expect AMD to generate $32.78 billion in revenue this year.
As part of the deal, AMD issued a warrant allowing OpenAI to purchase up to 160 million AMD shares for $0.01 each, vesting in stages based on performance targets agreed upon by both companies. The first tranche will vest following the initial MI450 chip shipments in late 2026, while subsequent tranches will depend on AMD achieving specific stock price milestones, culminating at $600 per share for the final unlock.
AMD currently has 1.62 billion outstanding shares, giving it a market capitalization of $267.23 billion. Its stock closed Friday at $164.67 per share. OpenAI is valued at around $500 billion.
OpenAI’s Growing Demand for GPUs
OpenAI has worked with AMD for years, contributing to the design of earlier-generation AI chips like the MI300X. The San Francisco–based company has been aggressively pursuing multiple avenues to secure enough chips to power its expanding AI infrastructure.
In September, Nvidia (NVDA.O) announced plans to invest up to $100 billion in OpenAI, which includes delivering systems capable of providing at least 10 gigawatts of computing power. The deal also covers OpenAI’s planned deployment of Nvidia’s next-generation Vera Rubin chips by late 2026.
Alongside Nvidia hardware, cloud giants such as Alphabet’s Google (GOOGL.O) and Amazon (AMZN.O) are developing their own in-house processors, while OpenAI is reportedly designing its own AI silicon in collaboration with Broadcom (AVGO.O), as Reuters reported last year.
Last month, OpenAI and its key backer Microsoft (MSFT.O) announced a non-binding agreement to restructure OpenAI into a for-profit entity, signaling further evolution in the company’s operational strategy.
A person familiar with the matter told Reuters that the AMD partnership will not affect OpenAI’s existing compute roadmap or its collaboration with Microsoft.
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