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AMD stock soars on AI chip pact with OpenAI, signaling deepening rivalry in Silicon Valley
AMD shares surged after striking a multiyear deal to supply AI chips to OpenAI, a partnership expected to generate massive revenue and challenge Nvidia’s dominance.
Advanced Micro Devices’ stock jumped 25 percent in premarket trading after the semiconductor company disclosed a sweeping multiyear agreement to supply artificial intelligence chips to OpenAI - a deal that could yield tens of billions of dollars in annual revenue.
The partnership, which highlights the intensifying race to secure computing power for large-scale A.I. development, reportedly includes an option allowing OpenAI to acquire as much as 10 percent of AMD’s equity. Financial terms of the equity provision have not been publicly disclosed.
Under the agreement, AMD will provide hundreds of thousands of its graphics processing units — totaling the equivalent of six gigawatts of capacity — over several years beginning in the second half of 2026. OpenAI is expected to begin constructing a one-gigawatt data center next year that will be powered by AMD’s next-generation MI450 series chips.
“We are thrilled to partner with OpenAI to deliver AI compute at massive scale,” said Dr. Lisa Su, chair and CEO, AMD. “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.”
“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” said Sam Altman, co-founder and CEO of OpenAI. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
“Building the future of AI requires deep collaboration across every layer of the stack,” said Greg Brockman, co-founder and President of OpenAI. “Working alongside AMD will allow us to scale to deliver AI tools that benefit people everywhere.”
“Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” said Jean Hu, EVP, CFO and treasurer, AMD. “This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD's non-GAAP earnings-per-share.”
The announcement positions AMD as a more forceful challenger to Nvidia, which has thus far dominated the market for chips used to train and run advanced A.I. systems. The scale and structure of the deal suggest OpenAI is seeking to diversify its hardware pipeline as demand for compute power accelerates.
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