Advanced Micro Devices (AMD) announced a multi-year agreement to supply OpenAI with 6 gigawatts of compute capacity using its upcoming MI450 series of AI chips, beginning in the second half of 2026.
The deal — among the largest in the AI chip industry’s history — could bring in tens of billions of dollars in annual revenue for AMD and give OpenAI the option to acquire up to 160 million shares of AMD, representing about 10% ownership.
Shares of AMD surged 34% Monday, marking their biggest one-day gain in nearly a decade and adding $80 billion to the company’s market capitalization.
“This agreement is transformative — not just for AMD, but for the dynamics of the AI industry,” said Forrest Norrod, AMD’s executive vice president.
OpenAI’s Expanding Chip Empire
Under the agreement, AMD will deliver the equivalent of six gigawatts of computing power — enough to power over 5 million US homes — across several GPU generations. The first 1-gigawatt deployment will mark the initial revenue milestone in 2026.
As part of the deal, OpenAI can purchase AMD shares at $0.01 per share, with tranches vesting upon performance milestones — including AMD’s stock reaching $600 per share for the final installment.
The partnership builds on OpenAI’s growing list of chip suppliers, including Nvidia, Broadcom, Samsung, and SK Hynix. Last month, OpenAI signed a $100 billion infrastructure deal with Nvidia, a $10 billion chip design pact with Broadcom, and a $300 billion cloud equipment purchase agreement with Oracle.
OpenAI CEO Sam Altman called the AMD partnership “a major step in building the compute capacity to realize AI’s full potential.”
AMD’s Big Moment — And Nvidia’s Response
AMD’s upcoming MI450 chips are designed to outperform Nvidia’s next-generation Rubin CPX GPUs, offering greater energy efficiency and memory bandwidth — features optimized with input from OpenAI engineers.
The deal also gives OpenAI a strategic foothold in AMD, a move analysts view as both financial and political leverage. “Unlike its arrangement with Nvidia, where OpenAI is just a client, this deal gives OpenAI a direct stake in AMD’s direction,” said A.J. Bell’s Dan Coatsworth.
Nvidia’s shares slipped 1%, even as analysts stressed that the deal would not threaten its dominance in the AI GPU market.
Financial and Market Impact
AMD expects to recognize its first revenue from the deal in 2026 and projects over $100 billion in cumulative revenue over four years from OpenAI and related customers.
The company currently forecasts $32.8 billion in 2025 revenue, meaning the OpenAI contract could triple its future earnings power.
AMD’s CFO Jean Hu said the partnership “creates significant strategic alignment and shareholder value for both AMD and OpenAI” and will be “highly accretive” to earnings per share.
At Monday’s close, AMD traded near $208 per share, up from $164 on Friday. The stock’s six-month gain now exceeds 75%, compared to 84% for Nvidia over the same period.
The AMD–OpenAI partnership marks a defining moment in the AI infrastructure race, giving AMD its biggest-ever win against Nvidia. With OpenAI’s stake, six gigawatts of GPU demand, and a multi-decade revenue pipeline, the deal could permanently shift the balance of power in the trillion-dollar AI chip market.
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