Advanced Micro Devices (AMD) has announced a landmark multi year partnership with OpenAI to supply hundreds of thousands of advanced artificial intelligence (AI) chips a deal expected to reshape the global AI hardware market and challenge Nvidia’s long-held dominance.
Under the agreement, AMD will deliver AI chips worth tens of billions of dollars in revenue over several years, with OpenAI gaining the option to purchase up to 10% of AMD through stock warrants. Shares of AMD surged more than 23% in premarket trading, potentially reaching their highest point since March 2024.
Beginning in the second half of 2026, AMD will deploy its powerful MI450 series GPUs equivalent to six gigawatts of computing capacity to support OpenAI’s expanding infrastructure. The partnership will also see OpenAI build a one-gigawatt data facility powered by these chips starting next year. AMD expects to start recognizing revenue once shipments begin, estimating more than $100 billion in new revenue over four years from OpenAI and related customers.
“This is a transformative moment not just for AMD, but for the entire AI chip industry,” said Forrest Norrod, AMD’s Executive Vice President. Strategy chief Mat Hein added that the partnership could inspire other companies to adopt AMD technology, calling OpenAI “a pioneer with vast influence across the ecosystem.”
The deal gives OpenAI a strong alternative to Nvidia’s hardware. Currently, OpenAI uses Nvidia systems and plans to deploy 10 gigawatts of Nvidia infrastructure, including the upcoming Vera Rubin chips, by late 2026. However, by diversifying its suppliers through AMD and developing its own AI chips with Broadcom OpenAI aims to secure the vast processing power needed to fuel ChatGPT and its growing AI applications.
As part of the agreement, OpenAI can buy up to 160 million AMD shares for just one cent each, tied to performance milestones such as chip delivery and AMD stock price targets which could rise to $600 per share in later stages.
AMD, currently valued at $267 billion with 1.62 billion shares outstanding, closed at $164.67 on Friday. Analysts project its 2025 revenue at around $32.78 billion, but the OpenAI deal could dramatically accelerate that growth.
OpenAI, valued at $500 billion, continues to strengthen its compute ecosystem. Alongside AMD and Nvidia, the company maintains partnerships with Microsoft, Google, Amazon, and Broadcom, while working on developing its own silicon chips.
The new AMD deal, sources said, does not alter OpenAI’s existing plans with Microsoft or its broader infrastructure goals but it marks a bold step toward redefining the future of AI chip innovation.
