"United States chipmaker AMD will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10 percent of the company. Shares of the chipmaker surged more than 34 percent on Monday when the deal was announced, putting them on track for their biggest one-day gain in more than nine years and adding roughly $80bn to the company's market value."
"The deal, latest in a string of investment commitments, underscores OpenAI and the broader AI industry's voracious appetite for computing power as companies race towards developing AI technology that meets or exceeds human intelligence. 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 the Reuters news agency."
"The agreement closely ties the startup at the centre of the AI boom to AMD, one of the strongest rivals of Nvidia, which recently agreed to make substantial investments in OpenAI. Analysts said it was a significant vote of confidence in AMD's AI chips and software but is unlikely to dent Nvidia's dominance, as the market leader continues to sell every AI chip it can make."
"AMD executives expect the deal to net tens of billions of dollars in annual revenue. Because of the ripple affect of the agreement, AMD expects to receive more than $100bn in new revenue over four years from OpenAI and other customers, they said. The chipmaker is expected to report revenue of $32.78bn this year, according to LSEG data. In contrast, analysts are expecting Nvidia to report revenue of $206.26bn for the current fiscal year."
AMD will supply artificial intelligence chips to OpenAI under a multi-year deal and grant OpenAI an option to buy up to roughly 10% of the company. The agreement is expected to generate tens of billions of dollars in annual revenue for AMD and prompted a more than 34% one-day surge in AMD shares, adding roughly $80bn to its market value. AMD executives project more than $100bn in new revenue over four years from OpenAI and other customers, while AMD's current-year revenue is forecast near $32.78bn versus Nvidia's expected $206.26bn. Analysts call the deal a validation of AMD's AI technology but do not expect it to displace Nvidia's dominance amid surging AI compute demand.
Read at www.aljazeera.com
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