OpenAI Chooses AMD for Major AI Chip Deal
▼ Summary
– AMD will supply AI chips to OpenAI in a multi-year deal worth tens of billions annually, including an option for OpenAI to acquire up to 10% of AMD stock for 1 cent per share.
– The agreement covers hundreds of thousands of AMD’s AI graphics processing units starting in the second half of 2026.
– This deal represents a major endorsement of AMD’s AI hardware and software as it competes with Nvidia in the AI chip market.
– AMD projects the agreement will generate over $100 billion in revenue over four years from OpenAI and other customers influenced by this partnership.
– AMD will begin booking income next year when OpenAI starts building a 1 gigawatt facility based on AMD’s forthcoming MI450 series chips.
OpenAI has entered into a major multi-year agreement with AMD to secure a substantial supply of artificial intelligence chips, signaling a significant shift in the AI hardware landscape. Announced on Monday, the deal involves AMD providing hundreds of thousands of its advanced AI graphics processing units to the creator of ChatGPT over several years, with deliveries scheduled to begin in the latter half of 2026. The financial scale of the arrangement is immense, reportedly amounting to tens of billions of dollars each year.
A particularly notable aspect of the agreement is a special provision granting OpenAI the right to purchase up to 10 percent of AMD’s stock at a symbolic price of one cent per share. This strategic move not only cements a strong partnership but also aligns the long-term interests of both companies in the rapidly expanding AI sector. The collaboration represents a powerful endorsement of AMD’s technology as it intensifies its competition with Nvidia for leadership in the AI accelerator market.
AMD’s leadership anticipates that this partnership will be a game-changer for the company’s financial trajectory. Executives project that the OpenAI deal, combined with business from other clients who may follow suit, is expected to generate over $100 billion in new revenue across a four-year period. This forecast underscores the deal’s potential to reshape AMD’s market position and the broader industry dynamics.
Forrest Norrod, an Executive Vice President at AMD, described the arrangement as “certainly transformative, not just for AMD, but for the dynamics of the industry.” The company will begin recognizing revenue from the contract next year, coinciding with OpenAI’s construction of a new, large-scale 1 gigawatt computing facility. This data center will be powered by AMD’s upcoming MI450 series of AI chips, highlighting the critical role of advanced semiconductor technology in supporting next-generation AI infrastructure.
(Source: Ars Technica)
