AMD's Monumental Deal with OpenAI to Generate Billions, Boost Earnings
AMD has inked a monumental deal with OpenAI, set to generate billions in revenue and boost earnings. The agreement involves a significant rollout of AMD's upcoming Instinct MI450 GPUs, with OpenAI potentially acquiring a 10% stake in the chipmaker.
The deal, announced on Monday, will kick off with a 1-gigawatt rollout of AMD's latest GPUs in the second half of 2026. This initial phase is expected to generate 'tens of billions of dollars' in revenue for AMD, significantly contributing to its non-GAAP earnings per share. The agreement is one of the largest GPU deployment deals in AI history, marking a major milestone for both companies.
The partnership goes beyond just supply. AMD and OpenAI will collaborate technically, aligning their product roadmaps and jointly advancing AI hardware and software. To sweeten the deal, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, which could potentially give OpenAI a 10% stake in the company if exercised. OpenAI President Greg Brockman stated that the deal is crucial for scaling AI globally and diversifying OpenAI's chip supply.
AMD's stock surged nearly 24% following the announcement, reflecting the market's enthusiasm for this strategic partnership. The multi-year, multi-generational deal will see OpenAI deploy up to 6 gigawatts of AMD Instinct GPUs, powering its next wave of models and services. This significant investment in AMD's technology underscores OpenAI's confidence in AMD's capabilities and the potential of their collaborative efforts.
