AMD has secured a significant multi-year chip supply agreement with OpenAI, a deal projected to generate tens of billions in revenue for the chipmaker and substantially boost its presence in the burgeoning AI industry. Under this partnership, AMD is set to provide 6 gigawatts of compute capacity to OpenAI, an amount equivalent to powering up to 4.5 million homes. This capacity will be delivered across several generations of AMD's Instinct GPUs, commencing with the new Instinct MI450 GPU.

The initial gigawatt of capacity is slated for deployment in the second half of 2026, coinciding with the MI450 chip's scheduled release. AMD asserts that its MI450 series will surpass rival offerings, specifically Nvidia’s comparable NVIDIA Rubin CPX, through a combination of advanced hardware and software enhancements, many of which will incorporate direct input from OpenAI. Currently, OpenAI already utilizes AMD's MI355X and MI300X series GPUs for certain workloads, recognizing their strong capabilities in AI inference for large language models due to their substantial memory capacity and bandwidth.

A notable component of the agreement grants OpenAI the option to acquire up to 160 million shares of AMD stock, representing a 10% stake in the company. The vesting of these shares is staggered: the first tranche will vest upon the initial 1 gigawatt deployment, with subsequent tranches vesting as OpenAI procures the full 6 gigawatts of capacity. Crucially, OpenAI's stake is also linked to AMD's stock price reaching specific milestones, with the final tranche vesting once the stock hits $600 per share. The market reacted positively to this news, with AMD shares closing at $164.67 on Friday and then opening at $222.24 on Monday, marking a nearly 35% increase.

This strategic alliance is a critical move for OpenAI as it aggressively pursues numerous chip partnerships to rapidly expand its AI infrastructure. This includes ambitious plans for five new 'Stargate' data centers, projected to have a combined capacity of 7 gigawatts. Dr. Lisa Su, AMD’s Chair and CEO, expressed enthusiasm for the partnership, stating, “This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.” Sam Altman, OpenAI's CEO, echoed this sentiment, calling the deal “a major step in building the compute capacity to realize AI’s full potential.”

The AMD deal is the latest in a series of major agreements OpenAI has forged recently to secure compute capacity. In the preceding month alone, Nvidia committed to investing up to $100 billion in OpenAI and supplying at least 10 gigawatts of capacity. Additionally, OpenAI and Broadcom signed a $10 billion deal focused on the development and manufacturing of custom AI chips. The 'Stargate' initiative also saw an expansion through partnerships with Oracle and SoftBank. Just last week, OpenAI further solidified its supply chain by reaching agreements with Samsung Electronics and SK Hynix to source DRAM memory chips essential for the Stargate project and to facilitate the construction of data centers in South Korea.