OpenAI announced a multi-year partnership with AMD to deploy 6 gigawatts of AI compute capacity powered by the chipmaker’s upcoming Instinct MI450 GPUs. The deal, worth tens of billions of dollars annually, gives AMD a foothold in the booming AI market — and potentially reshapes the balance of power in the global semiconductor industry.

A Landmark Partnership for AMD

Under the agreement, AMD will begin supplying chips to OpenAI in the second half of 2026, starting with 1 gigawatt of compute. The partnership also gives OpenAI the right to acquire up to a 10% stake in AMD, through 160 million shares that vest as performance milestones are met.

Following the announcement, AMD stock exploded over 34%, adding roughly $80 billion in market value — its largest one-day jump in nearly a decade. CFO Jean Hu said the deal will be “transformative,” with long-term revenue expected to exceed $100 billion over four years from OpenAI and related clients.

“This partnership is a true win-win,” AMD CEO Lisa Su said. “It accelerates the world’s most ambitious AI buildout while advancing the entire AI ecosystem.”

Why It’s a Blow to Nvidia

For years, Nvidia has dominated the AI hardware market — controlling over 80% of global GPU sales for AI workloads. But OpenAI’s move gives AMD its biggest competitive breakthrough to date, validating its technology and positioning it as a genuine challenger.

Just last month, Nvidia signed its own $100 billion deal with OpenAI, supplying 10 gigawatts of GPUs for future data centers. Yet, unlike Nvidia’s agreement — where OpenAI remains strictly a client — AMD’s deal gives OpenAI an ownership stake, aligning incentives more closely and deepening collaboration.

Market watchers say this could pressure Nvidia to defend its dominance through faster innovation, new pricing models, or expanded infrastructure partnerships.

Powering the AI Boom

The 6GW chip supply equals the energy needed to power about five million US homes, reflecting AI’s massive infrastructure demands. OpenAI’s global expansion plans — including new “Stargate” data centers with Oracle and SoftBank — are driving record investment across the semiconductor and power industries.

“AI demand has reached a point where one supplier can’t meet it alone,” said one analyst. “AMD’s entrance ensures the ecosystem stays competitive — and that’s healthy for everyone except Nvidia’s margins.”

OpenAI’s megadeal with AMD marks a strategic turning point in the AI chip wars. It gives AMD long-sought validation, diversifies OpenAI’s supplier base, and signals that Nvidia’s once-unchallenged dominance is finally facing real competition — just as the AI revolution enters its most power-hungry phase yet.

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