"( Advanced Micro DevicesNASDAQ:AMD) shocked investors yesterday with a landmark multi-year agreement to supply OpenAI with 6 gigawatts of its Instinct graphics processing units (GPUs), starting with 1 gigawatt in the second half of 2026. The deal, which could generate tens of billions in annual revenue for AMD, includes a warrant allowing OpenAI to acquire up to 160 million shares - roughly 10% of the company - for a nominal fee, tied to deployment milestones and stock price targets up to $600 per share."
"The OpenAI pact catapults AMD into direct competition with ( NvidiaNASDAQ:NVDA), which inked a similar 10-gigawatt deal in September worth up to $100 billion in investments to fund OpenAI's data centers. Both agreements highlight OpenAI's strategy to diversify suppliers and build massive AI capacity - 23 gigawatts total across partners - while locking in chip volumes. For AMD, this means co-designing rack-scale solutions with OpenAI, boosting its software ecosystem like ROCm to rival Nvidia's CUDA. Analysts see it as a "transformative" shift, proving AMD's chips can handle frontier AI workloads at scale."
AMD agreed to supply OpenAI with 6 gigawatts of Instinct GPUs, beginning with 1 gigawatt in the second half of 2026, and granted a warrant allowing OpenAI to acquire up to 160 million shares tied to deployment and price milestones. The contract could generate tens of billions in annual revenue and potentially enable roughly $100 billion in revenue over four years from OpenAI and other customers. AMD stock jumped 24% to $203.71, adding over $63 billion in market value. The deal positions AMD as a core AI compute partner, intensifies competition with Nvidia, and accelerates ROCm and rack-scale co-design efforts.
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