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AMD Secures Multi-Billion-Dollar AI Chip Deal with OpenAI

AMD and OpenAI Forge Historic AI Chip Partnership

Chipmaker Advanced Micro Devices (AMD) has announced a multi-billion-dollar, multi-year agreement to supply OpenAI with advanced AI computing hardware. The deal represents one of the largest commitments in AI infrastructure to date.

The Agreement Details

Under the terms of the partnership:

  • AMD will provide 6 gigawatts (GW) of computing power - equivalent to powering approximately 450,000 homes
  • Deliveries will begin with AMD's upcoming Instinct MI450 GPUs in late 2026
  • The arrangement covers AMD's entire Instinct GPU product line Image

Technical Advantages

The new MI450 series reportedly outperforms Nvidia's competing Rubin CPX GPUs through hardware and software enhancements developed with OpenAI's input. Current AMD MI355X and MI300X GPUs already power some OpenAI workloads, benefiting from superior memory capacity and bandwidth for large language model inference.

Financial Considerations

The agreement includes:

  • An option for OpenAI to purchase up to 160 million AMD shares (10% of outstanding stock)
  • Vesting tied to computing power delivery milestones and stock performance:
    • Initial vesting at first 1GW deployment
    • Full vesting requires AMD shares reaching $600 (currently ~$222)

The announcement sent AMD shares soaring 35% in early trading.

Strategic Importance

The deal comes as:

  • OpenAI expands its "Stargate" data center project targeting 7GW capacity
  • AMD strengthens its position against Nvidia's AI dominance
  • Tech firms scramble to secure scarce AI hardware resources

AMD CEO Dr. Lisa Su called the collaboration "the fusion of our strengths," while OpenAI's Sam Altman described it as crucial for realizing AI's potential.

The partnership follows OpenAI's recent agreements with:

  • Nvidia ($100B investment)
  • Broadcom ($10B custom chip development)
  • Samsung/SK Hynix (memory supply) oracle and SoftBank collaborations.

Key Points:

  1. Historic multi-year deal valued in billions between AMD and OpenAI
  2. AMD commits 6GW computing power via Instinct GPU lineup
  3. Includes stock options vesting based on delivery milestones
  4. Strengthens AMD's position against Nvidia in AI hardware race
  5. Supports OpenAI's massive infrastructure expansion plans