AMD Inks Landmark Deal with OpenAI, Boosting Computing Power and Market Presence
AMD, a leading semiconductor company, has announced a significant partnership with OpenAI, a prominent artificial intelligence (AI) research organization. The deal, which was revealed on October 6, 2025, will see AMD deploy six gigawatts of computing power to OpenAI, with the option for OpenAI to acquire up to 10 percent of AMD’s stock, valued at approximately $33 billion. This collaboration mirrors a recent agreement between OpenAI and Nvidia, AMD’s main competitor in the graphics processing unit (GPU) market.
OpenAI’s Sam Altman and AMD’s Lisa Su testify before the Senate on May 08, 2025 in Washington, DC. Photo by Chip Somodevilla/Getty Images
Boosting Computing Power and Market Presence
The partnership between AMD and OpenAI is expected to significantly enhance OpenAI’s computing resources, enabling the organization to develop and deploy more advanced AI models and tools. According to OpenAI CEO Sam Altman, “This partnership is a major step in building the compute capacity needed to realize A.I.’s full potential.” The deal will see AMD’s MI450 chips used in OpenAI’s first one-gigawatt deployment, scheduled for the second half of 2026.
The collaboration also includes a stock grant, which will allow OpenAI to acquire up to 160 million shares of AMD stock as deployments scale to six gigawatts. The stock grant will vest based on OpenAI hitting technical and commercial milestones, with the full deal contingent on AMD’s stock reaching $600 per share. Currently, AMD shares are traded at $204 apiece.
A Strategic Move in the AI Market
The AMD-OpenAI partnership is the latest in a series of significant deals in the AI market. Recently, Nvidia announced a long-term pact with OpenAI, pledging up to $100 billion in investments over the next decade. In return, OpenAI will obtain as much as 10 gigawatts of computing power from Nvidia’s systems. This move has sparked a surge in global venture capital funding, with nearly half of the $97 billion invested in the third quarter flowing into AI ventures, according to Crunchbase.
Analysts believe that the current AI boom is reminiscent of the early days of the internet. Dan Ives, an analyst with Wedbush Securities, noted that “We still believe we are in the early innings of this spending cycle.” AMD’s new deal with OpenAI marks a “1996 moment” for the tech world, he added, likening today’s AI momentum to the foundational years of the tech economy.
Nvidia’s shares slipped more than 1 percent following AMD’s announcement, but the company still holds a commanding lead with over 90 percent of the global GPU market. However, AMD’s CEO Lisa Su is confident that the OpenAI deal will accelerate growth, stating that the company has a “clear line of sight” to achieve tens of billions of dollars in data center revenue by 2027.
Image Source: observer.com
