In a bold move that’s sent shockwaves through the tech and investment world, Advanced Micro Devices (AMD) has clinched a multibillion-dollar partnership with AI giant OpenAI, causing a sharp rise in the AMD share price on Monday morning.
AMD Strikes Multibillion-Dollar Deal with OpenAI
This strategic alliance will see AMD supply more than 6 gigawatts worth of GPUs across several product generations, beginning with its highly anticipated MI450 chips, due to roll out in the latter half of 2026.
In return, OpenAI will acquire a stake of up to 160 million shares in AMD, equating to about 10% ownership.
The shares, however, will be released in tranches, contingent on AMD meeting key hardware deployment milestones, the first being the successful delivery of 1 gigawatt of chips.
“Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout.
This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD’s non-GAAP earnings-per-share,” Jean Hu, CFO of AMD
A Strategic Gamble That’s Paying Off
This deal has been hailed as a major breakthrough for AMD, positioning it as a credible and powerful alternative to Nvidia in the AI hardware race.
While Nvidia has long dominated the market, AMD’s sudden leap forward suggests it’s no longer content playing second fiddle.
Just weeks before this deal, Nvidia revealed its own colossal $100 billion commitment to OpenAI, intended to fund the buildout of next-generation data centres to power OpenAI’s growing suite of AI solutions.
But with AMD now in the mix and with such a large equity deal on the table, the landscape has shifted dramatically.
The AMD share price skyrocketed on Monday after it announced a strategic deal with OpenAI, signalling a major pivot in the AI hardware market.
Analysts view this as a significant challenge to Nvidia’s dominance, with AMD poised for substantial long-term growth.
A $500 Billion Bet on the Future
The stakes are enormous. OpenAI is currently valued at $500 billion, making it the world’s most valuable startup. It’s already been making huge waves just last month, it finalised a $300 billion agreement with Oracle to secure cloud equipment.
These massive investments indicate that OpenAI’s infrastructure demands are only increasing, and AMD is stepping up to meet them.
While AMD has traditionally lagged behind Nvidia in the stock market, showing just a 1% gain over the past 12 months, compared to Nvidia’s 52% rise, things have begun to shift.
Over the past six months, AMD shares have climbed 75%, with Nvidia’s growing 84% in the same time frame.
The latest OpenAI deal could be the inflexion point AMD investors have been waiting for.
Market Hype or Long-Term Growth?
Despite all the excitement, not everyone is convinced. At Italian Tech Week, Amazon founder Jeff Bezos voiced caution over a potential AI bubble, warning that valuations and expectations may be outpacing reality.
Still, Bezos acknowledged the global, transformative power of AI, suggesting that bubble or not, the long-term gains could be substantial.
With Wall Street pouring unprecedented sums into AI, and with companies like AMD, Nvidia, and Oracle all vying for a piece of the pie, the AI arms race shows no sign of slowing.
What’s Next for AMD?
This landmark deal with OpenAI not only cements AMD’s place in the rapidly evolving AI ecosystem but also puts a bullish spotlight on the AMD share price moving forward.
The next major milestone? The deployment of the first 1 gigawatt of GPUs. If AMD hits that target, expect more tranches to vest and more investor attention to follow.
For now, though, one thing’s clear: AMD has officially entered the AI big leagues.
