OpenAI and chipmaker AMD announced a significant multibillion-dollar chip deal that positions OpenAI to acquire a 10% stake in AMD. This partnership has been seen as a major endorsement of AMD’s capabilities in artificial intelligence (AI) chips and software, driving AMD’s stock price up over 30% and increasing its market capitalization by approximately $80 billion following the announcement.
Forrest Norrod, AMD’s executive vice-president, characterized the agreement as transformative not only for AMD but also for the broader tech industry landscape. The deal underscores the surging demand for computing power in the AI sector, which is racing to advance technologies that could surpass human intelligence. Sam Altman, CEO of OpenAI, emphasized that access to computing power is a critical constraint on the company’s growth, highlighting the need for substantial data centers filled with advanced semiconductor chips.
The arrangement involves the deployment of hundreds of thousands of AMD’s AI chips, specifically its graphics processing units (GPUs). This deployment is expected to reach a scale of six gigawatts over several years, starting in the latter half of 2026. To put this into perspective, six gigawatts is equivalent to the energy consumed by approximately 5 million US households or roughly three times the annual electricity output of the Hoover Dam. In conjunction with this, OpenAI plans to construct a one-gigawatt facility utilizing AMD’s forthcoming MI450 series of chips starting next year.
As part of the deal, AMD has issued a warrant that allows OpenAI to purchase up to 160 million shares of AMD at a nominal price of one cent per share throughout the duration of the agreement. AMD anticipates that this collaboration will yield tens of billions of dollars in annual revenue, projecting over $100 billion in new revenue within four years due to the ripple effects of the partnership.
This deal comes on the heels of Nvidia’s recent $100 billion investment in OpenAI, strengthening the alliance between two key players in the artificial intelligence domain. Mat Hein, AMD’s strategy chief, noted that the collaboration with OpenAI could attract additional customers, reinforcing the notion that OpenAI serves as a pioneering influence in the industry.
Although details on OpenAI’s funding mechanisms for this sizable deal remain unclear, the startup is currently valued at around $500 billion. It reported $4.3 billion in revenue in the first half of 2025 while spending approximately $2.5 billion, largely in efforts to secure top talent and invest in the development of new AI innovations.
As AI technologies continue to evolve, this partnership between OpenAI and AMD signals a pivotal moment in the industry’s trajectory, one that could redefine capabilities and market dynamics in the coming years.
