AMD announces major AI chip deal with OpenAI
AMD has secured a multi-year agreement to supply AI chips to OpenAI, valued at tens of billions of dollars annually, including an option for OpenAI to buy up to 10% of AMD's stock for a penny per share. The deal, covering hundreds of thousands of AMD's AI graphics processing units starting in late 2026, underscores OpenAI's efforts to diversify its chip suppliers amid surging AI demand. AMD executives hail it as transformative for the industry.
On Monday, AMD revealed a landmark partnership with OpenAI, the creator of ChatGPT, to provide AI chips in a deal projected to generate tens of billions of dollars each year. The agreement spans several years and includes the deployment of hundreds of thousands of AMD's AI graphics processing units, beginning in the second half of 2026. As part of the terms, OpenAI gains the right to purchase up to 160 million shares of AMD—equivalent to 10% of the company—at just 1 cent per share.
This collaboration highlights AMD's growing role in the AI chip market, where it vies with Nvidia for supremacy. AMD's executive vice president, Forrest Norrod, described the deal to Reuters as "certainly transformative, not just for AMD, but for the dynamics of the industry." The company anticipates over $100 billion in new revenue over four years from OpenAI and potential follow-on customers. Revenue recognition will begin next year, tied to OpenAI's construction of a 1-gigawatt facility using AMD's upcoming MI450 series chips. Overall, the pact will deliver the equivalent of 6 gigawatts of computing power via AMD hardware across multiple years.
OpenAI's move diversifies its supply chain as AI compute needs explode. The company has collaborated with AMD for years, contributing to designs like the MI300X chip. Recently, in September, Nvidia committed up to $100 billion to OpenAI, including at least 10 gigawatts of its systems, with plans for 1 gigawatt of next-generation Vera Rubin chips by late 2026. Despite this, OpenAI continues developing its own AI silicon in partnership with Broadcom and maintains ties with Microsoft. A source familiar with the matter confirmed to Reuters that the AMD deal aligns with these existing strategies without altering them.