On Monday, AMD announced a multi-year agreement to provide artificial intelligence chips to OpenAI, a deal expected to generate tens of billions of dollars in yearly revenue. This arrangement also allows OpenAI the creator of ChatGPT the option to acquire up to approximately 10% of the chip manufacturer.
The agreement provides OpenAI with a chance to invest in one of Nvidia's strongest competitors and signifies major support for AMD's AI hardware and software. "We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry," AMD executive vice president Forrest Norrod told Reuters on Sunday.
This recent agreement, part of a series of investment pledges, highlights OpenAI and the wider AI sector's strong demand for computing power as firms compete to create AI technology that rivals or surpasses human intelligence. AMD's stock jumped over 35% in premarket trading, potentially setting them up to open at their highest point since March 2024, assuming the gains persist.
AMD-OpenAI Deal Could Bring $100B+ in AI Chip Revenue
The deal involves the installation of hundreds of thousands of AMD's AI chips, or GPUs, totaling six gigawatts, over a period of several years starting in the latter half of 2026. AMD announced that OpenAI plans to construct a one-gigawatt facility using its upcoming MI450 series of chips starting next year, and AMD will start recognizing revenue at that time.
AMD leaders anticipate that the agreement will generate annual revenues in the tens of billions of dollars. Due to the agreement's impact, AMD foresees gaining over $100 billion in new revenue over the next four years from OpenAI and other clients, according to their statement.
"Other people are going to come along with it because this is really the pioneer, a pioneer in the industry that has a lot of influence over the broader ecosystem," AMD strategy chief Mat Hein said.
OpenAI-AMD Chip Deal Raises Funding Questions Amid High Stakes
OpenAI CEO Sam Altman says the AMD partnership will help build critical AI infrastructure, though it's unclear how OpenAI will fund the large-scale deal. Reports show OpenAI made $4.3B in H1 2025, spending $2.5B on talent and AI tool development.
Under the deal, AMD granted OpenAI a warrant to purchase up to 160 million shares at just 1 cent each, tied to performance milestones. The first unlocks after AMD ships its MI450 chips in late 2026, with later tranches tied to AMD stock hitting targets up to $600 per share.
AMD currently has 1.62 billion shares and is valued at $267.23B, while OpenAI holds a $500B valuation.
