Advanced Micro Devices (AMD) shares surged 23.7 per cent in Monday’s trading following the news that Sam Altman’s OpenAI could take a 10 per cent stake in the American chipmaker.
The two companies announced a 6 gigawatt (GW) agreement to power OpenAI’s next-generation AI infrastructure across multiple generations of AMD Instinct GPUs. The first 1 gigawatt deployment of AMD Instinct MI450 GPUs is set to begin in the second half of 2026.
OpenAI gains a stake option in AMD
As part of the agreement, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, structured to vest as specific milestones are achieved. The first tranche vests with the initial 1GW deployment, with additional tranches vesting as purchases scale up to 6GWs.
Vesting is further tied to AMD achieving certain share-price targets and to OpenAI achieving the technical and commercial milestones required to enable AMD deployments at scale. If OpenAI exercises the full warrant, it could acquire approximately 10 per cent ownership in AMD, based on the current number of shares outstanding.
The deal positions AMD as a core strategic partner to OpenAI, marking one of the largest GPU deployment agreements in the AI industry to date.
The news catapulted AMD shares to US$203.71, up US$39.04, or 23.71 per cent. It increased further to US$206.84 in after hours.
Less than two weeks ago, OpenAI had signed a US$100 billion equity-and-supply agreement with Nvidia.
Altman, co-founder and CEO of OpenAI, commented: “This partnership is a major step in building the compute capacity needed to realise AI’s full potential. AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
OpenAI President Greg Brockman told CNBC that this agreement was necessary because his company is already unable to launch many features in ChatGPT and other products that could generate revenue because of the lack of compute power.
Dr Lisa Su, chair and CEO, AMD, appeared on CNBC and added that AI is on a 10-year growth path, and “at the end of the day, you need the foundational compute to do that.”
“You need partnerships like this that really bring the ecosystem together to ensure that we can really get the best technologies out there. 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.”
Under the definitive agreement, OpenAI will work with AMD as a core strategic compute partner to drive large-scale deployments of AMD technology starting with the AMD Instinct MI450 series and rack-scale AI solutions, and extending to future generations.
By sharing technical expertise to optimise their product roadmaps, AMD and OpenAI are deepening their multi-generational hardware and software collaboration that began with the MI300X and continued with the MI350X series.
Jean Hu, EVP, CFO and treasurer, AMD, added: “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.”
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