AMD and OpenAI strategic partnership has immediate effect – on stock prices at least

AMD and OpenAI have announced a multi-year strategic partnership that will place AMD technology at the heart of OpenAI’s global infrastructure. It’s the clearest signal yet that Nvidia’s dominance in AI – which has made it the world’s most valuable company – may finally be ending.

“This partnership is a major step in building the compute capacity needed to realise AI’s full potential,” said Sam Altman, Co-Founder and CEO of OpenAI in the full announcement. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”

Dr Lisa Su, Chair and CEO of AMD, was even more effusive. “We are thrilled to partner with OpenAI to deliver AI compute at massive scale,” she said. “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.”

The first win? That goes to AMD shareholders, who saw their stock rocket from $164.47 per share overnight to a day-high of $226.56. That’s over a third up.

What’s in the AMD OpenAI agreement

The key part of the AMD/OpenAI agreement is that, over multiple years, the OpenAI AI infrastructure will incorporate 6 gigawatts of AMD Instinct GPUs. Until now, most of the GPUs – the crucial AI accelerators behind ChatGPT’s success – in OpenAI’s AI infrastructure have been made by Nvidia.

The first deployment will be of AMD’s Instinct MI450 series GPUs, with the rollout set to begin in the second half of 2026.

In return, AMD has guaranteed OpenAI 160 million shares of AMD stock – worth $26.2 billion at the time of the agreement and around $34 billion at the time of writing based on current stock value – to vest based on agreed milestones.

“The first tranche vests with the initial 1 gigawatt deployment, with additional tranches vesting as purchases scale up to 6 gigawatts,” stated the announcement. “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.”

According to TechCrunch, the share value will need to reach a value of $600 per share before the final tranche of shares will vest. So there’s some way to go yet.

Money matters

The financial side of the deal was further emphasised by Jean Hu, EVP, CFO and treasurer of AMD.

“Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” she said in the statement.

“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.”

Related AMD news

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• AMD General Manager Jack Huynh: “We want first to build a great PC, a better PC, maybe the perfect PC, and then we’ll add the best AI capability”
• “Now is our time”: Why AMD’s commercial PC boss believes this is the year it will take its rightful share of business laptop sales