Is AMD Turning Into Nvidia's Kryptonite? Here's How High It Can Go

"and have been locked in a high-stakes AI chip race that has sent investors into a frenzy, especially around AMD. Recently, AMD announced a major AI infrastructure partnership with OpenAI. As part of the deal, OpenAI can acquire up to 10% of AMD. Wall Street sees this as a validation of AMD's hardware accelerators. Analysts think that AMD accelerators can be at a "good enough" stage where companies are feeling comfortable using them at a very large scale."

"The OpenAI-AMD Deal OpenAI is buying 6 GW of AMD Instinct-GPU compute capacity over five years. First 1 GW must be installed and accepted in H2-2026 using the MI450-series GPUs. AMD issued one warrant to OpenAI for up to 160 million shares of AMD common stock, or about 10% of current shares. These warrants expire around 5 years from now."

"The OpenAI deal is expected to generate tens of billions in revenue over several years, as AMD will supply 6 GW of AI compute hardware. For context, that's around 0.5% of total U.S. power capacity. For the past three years, there hasn't been any serious head-to-head competition against Nvidia. is one name that springs to mind, but again, its custom chips don't offer direct competition. Still, the fact that it was stealing some market share caused AVGO stock to surge in earlier months."

OpenAI will buy 6 GW of AMD Instinct-GPU compute capacity over five years, with the first 1 GW required installed and accepted in H2-2026 using MI450-series GPUs. AMD issued a warrant allowing OpenAI to acquire up to 160 million shares, roughly 10% of current common stock, expiring in about five years. The contract could produce tens of billions in revenue and triggered a significant market reaction despite dilution. Supplying 6 GW of AI compute equates to roughly 0.5% of U.S. power capacity. Nvidia has moved to counter with custom x86 CPUs and x86 SoCs paired with RTX GPU chiplets.

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