In a bold move signaling a shift in the artificial intelligence landscape, OpenAI has announced a deal to purchase 6 gigawatts of computing power from data centers that will utilize exclusively AMD chips. This partnership poses a significant challenge to Nvidia, which has established itself as the leading AI chipmaker, boasting a market capitalization of $4.6 trillion, making it the world’s most valuable public company.
OpenAI, renowned for its ChatGPT AI chatbot, has recently captured attention with the launch of its innovative video generator, Sora 2. Just two weeks prior to this announcement, OpenAI had forged a monumental $100 billion partnership with Nvidia, which is set to begin delivering chips in 2026. However, the increasing demand for AI computing resources prompted OpenAI to diversify its partnerships.
Under the terms of the new agreement, OpenAI will secure 1 gigawatt of power by the next year, with plans to add an additional 5 gigawatts utilizing future generations of AMD’s high-end Instinct processors. OpenAI intends to collaborate closely with AMD in developing this technology.
The announcement had a significant impact on the stock market, with AMD shares soaring 24% in premarket trading, while Nvidia’s stock experienced a 2% decline. While the details regarding the financial specifics of the partnership were not revealed, both companies have indicated that it will contribute tens of billions of dollars in revenue for AMD. As part of the deal, AMD has granted OpenAI a warrant for 160 million shares, valued at over $26.3 billion based on Friday’s closing price, which will vest as specific milestones—including share price targets and technological achievements—are met. Lisa Su, AMD’s CEO, labeled the arrangement as “the world’s most ambitious AI buildout.”
Sam Altman, OpenAI’s CEO, expressed optimism about the partnership, stating, “This partnership is a major step in building the compute capacity needed to realize AI’s full potential. AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.” Su echoed similar sentiments, describing the collaboration as “win-win.”
The sheer scale of investments within the AI sector is staggering. In addition to the AMD agreement, OpenAI struck a deal with Oracle last month for $300 billion over five years to secure 4.5 gigawatts of data center space. Additionally, the company established a $10 billion chip design agreement with Broadcom.
It has become increasingly apparent that the eight most valuable companies in the market, now all with valuations exceeding $1.4 trillion, are heavily invested in AI. Following Nvidia in this ranking are tech giants like Microsoft, Apple, Google, Amazon, and Meta, each of which has recently unveiled consumer-focussed AI products. Broadcom holds a valuation of $1.6 trillion, while Tesla, led by Elon Musk, occupies the eighth spot, betting its future on AI-driven initiatives.
Despite the massive gains seen in the AI market, concerns have been raised by Wall Street analysts regarding the sustainability of this growth, with fears that the AI market may be forming a bubble fueled more by fear of missing out than by solid fundamentals.
