AMD Challenges Nvidia with Massive OpenAI Chip Deal
AMD is partnering with OpenAI to supply six gigawatts of processors for AI data centers, directly challenging Nvidia’s dominance in the AI chip market. This five-year agreement is designed to bolster OpenAI’s infrastructure, meeting the increasing computational demands of applications like ChatGPT. Deployment is set to begin in the second half of 2026, starting with a gigawatt of AMD Instinct MI450 GPUs, according to a company press release.
AMD anticipates the deal will generate “tens of billions of dollars in revenue” but did not provide further specifics. Following the Monday announcement, AMD’s stock price saw a significant 24 percent increase in pre-market trading.
This partnership follows OpenAI’s “strategic partnership” announcement with Nvidia last month, which aimed to deploy at least 10 gigawatts of AI data centers using Nvidia GPUs. While a letter of intent has been signed, the Nvidia deal is not yet finalized and reportedly includes a potential investment of “up to $100 billion in OpenAI.”
OpenAI previously designated Nvidia as a “preferred strategic compute and networking partner” for its new data centers. In contrast, the AMD announcement describes the chipmaker as a “core strategic compute partner.” A key component of the AMD deal allows OpenAI to receive up to 160 million AMD shares, representing approximately a ten percent stake in the company, at a cent per share, “as specific milestones are achieved.”
“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 the benefits of advanced AI to everyone faster.”
These agreements with both AMD and Nvidia follow a January adjustment to OpenAI’s exclusive partnership with Microsoft, which allowed the AI company to pursue deals with other cloud providers for compute power. OpenAI and Microsoft are now nearing a new arrangement, having signed a “non-binding memorandum of understanding” in September that could pave the way for a future OpenAI IPO.
“We are thrilled to partner with OpenAI to deliver AI compute at massive scale,” AMD CEO Lisa Su said in the deal announcement. “This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”