Advanced Micro Devices Inc. (AMD) experienced a significant surge in its stock price following the announcement of a multi-year agreement with OpenAI to supply artificial intelligence (AI) chips.
The deal, disclosed on October 6, 2025, led to a 34% increase in AMD’s share price, marking one of the company’s most substantial single-day gains in recent years. This partnership positions AMD as a key player in the rapidly expanding AI infrastructure sector.
Under the terms of the agreement, OpenAI will purchase AMD’s upcoming Instinct MI450 chips, with the initial deployment of one gigawatt of computing power scheduled for the second half of 2026.
The total commitment amounts to six gigawatts of computing capacity, equivalent to the energy consumption of approximately five million U.S. homes.
To facilitate this, OpenAI plans to construct a dedicated one-gigawatt facility utilizing AMD’s chips. The deal also includes a provision granting OpenAI the option to acquire up to 10% of AMD’s shares through warrants, contingent upon meeting specific performance milestones and stock price targets.
This partnership underscores OpenAI’s strategy to diversify its hardware suppliers beyond its existing relationships with Nvidia and Broadcom.
While Nvidia remains a dominant supplier of AI chips, the collaboration with AMD reflects the growing demand for computational power in AI development and the need for a more diversified supply chain.
Analysts view this move as indicative of the increasing competition in the AI hardware market.
From AMD’s perspective, the agreement represents a significant opportunity to expand its footprint in the AI sector. The company anticipates that this partnership could generate over $100 billion in new revenue over the next four years, driven by OpenAI and similar clients.
The deal also serves as a validation of AMD’s technological capabilities in high-performance computing.
The announcement has had a notable impact on the stock market. AMD’s share price closed at $203.71, up from $164.67 the previous day, adding approximately $80 billion to the company’s market capitalization.
In contrast, shares of Nvidia, which had previously announced a $100 billion deal with OpenAI, experienced a slight decline following the news. This shift highlights the dynamic nature of the AI hardware market and the competitive landscape among chipmakers.
OpenAI’s decision to enter into this agreement with AMD is part of its broader strategy to build a robust AI infrastructure capable of supporting advanced models and applications.
CEO Sam Altman emphasized the importance of this partnership in meeting the escalating demand for AI computing power. He noted that the collaboration with AMD complements OpenAI’s existing relationships with other hardware providers, ensuring a diversified and resilient infrastructure.
As the AI industry continues to evolve, partnerships like the one between AMD and OpenAI are likely to play a crucial role in shaping the future of AI development.
The increasing reliance on advanced computing resources underscores the importance of strategic collaborations in meeting the growing demands of AI technologies.
The AMD-OpenAI partnership marks a significant development in the AI hardware sector.
It not only enhances AMD’s position in the market but also reflects the broader trends of diversification and competition in AI infrastructure.
As both companies move forward with their plans, the success of this collaboration could have far-reaching implications for the future of AI development and deployment.
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