OpenAI has announced a groundbreaking multi-billion-dollar partnership with AMD to supply artificial intelligence chips, marking a significant shift in the AI hardware landscape. The multi-year agreement, revealed on Monday, will see OpenAI deploy 6 gigawatts of AMD GPUs, with the initial 1 gigawatt deployment scheduled to begin in the second half of 2026.
Sam Altman, OpenAI’s cofounder and CEO, emphasized the strategic importance of the deal, stating it represents “a major step in building the compute capacity needed to realize AI’s full potential.” The partnership provides AMD with a crucial opportunity to challenge Nvidia’s dominance in the AI chip market, which has been the primary supplier for most major AI companies.
The deal includes an innovative equity component, allowing OpenAI to acquire approximately a 10% stake in AMD. These shares will vest progressively as the companies achieve deployment milestones and AMD reaches specific share price targets, aligning both parties’ interests in the partnership’s success.
AMD’s CFO Jean Hu projected the deal will generate “tens of billions of dollars in revenue” for the company, reflecting the massive scale of the agreement. Market response was immediate and enthusiastic, with AMD’s share price surging as much as 27% in premarket trading following the announcement.
The first wave of deployments will feature AMD’s Instinct MI450 Series GPUs, which are designed for both training AI models and inference operations. Lisa Su, AMD’s chair and CEO, characterized the partnership as a “true win-win” that will advance the entire AI ecosystem, positioning AMD as a serious competitor in the high-performance AI computing market.
This AMD deal represents the latest in a series of major chip partnerships for OpenAI. Last month, Nvidia announced plans to invest $100 billion in OpenAI, providing access to 10 gigawatts of high-powered GPUs. Additionally, in July, OpenAI partnered with Oracle to develop up to 4.5 gigawatts of AI compute capacity in a deal valued at over $300 billion over five years.
These massive agreements underscore the enormous power requirements of modern AI infrastructure, with 1 gigawatt roughly equivalent to the electricity needed to power all homes in a midsize city like San Francisco at any given moment.
Key Quotes
This partnership is a major step in building the compute capacity needed to realize AI’s full potential
Sam Altman, OpenAI’s cofounder and CEO, emphasized the strategic importance of securing massive computing infrastructure to support the company’s ambitious AI development roadmap and future model training needs.
tens of billions of dollars in revenue
AMD’s CFO Jean Hu projected the financial impact of the deal, highlighting the massive scale of the partnership and its significance for AMD’s business growth and competitive position against Nvidia.
true win-win
Lisa Su, AMD’s chair and CEO, characterized the partnership as mutually beneficial, emphasizing how the deal advances both companies’ interests while strengthening the broader AI ecosystem through increased competition and innovation.
Our Take
This deal signals a fundamental shift in AI infrastructure strategy, where leading AI companies are actively diversifying their hardware dependencies to avoid vendor lock-in and ensure supply chain resilience. OpenAI’s willingness to take equity stakes in chip manufacturers suggests a longer-term vision of vertical integration in the AI stack. The timing is particularly strategic—by securing multiple chip partnerships totaling over 20 gigawatts, OpenAI is positioning itself for the next generation of AI models that will require unprecedented computational resources. The 27% surge in AMD’s stock price reflects market recognition that the AI chip market is becoming more competitive, potentially ending Nvidia’s pricing power. However, the 2026 deployment timeline indicates these benefits won’t materialize immediately, giving Nvidia time to respond. The energy implications—gigawatts of power consumption—underscore that AI’s infrastructure challenges extend far beyond chips to fundamental questions about sustainable energy sourcing.
Why This Matters
This partnership represents a pivotal moment in the AI hardware industry, potentially breaking Nvidia’s near-monopoly on AI chips and creating a more competitive marketplace. For OpenAI, diversifying chip suppliers reduces dependency on a single vendor and provides leverage in negotiations, while ensuring access to the massive computing power required for next-generation AI models.
The deal’s structure—combining guaranteed chip supply with equity stakes—establishes a new model for AI infrastructure partnerships that aligns long-term interests between AI developers and hardware manufacturers. This could reshape how future AI companies secure computing resources.
The scale of power consumption highlighted by these deals (totaling over 20 gigawatts across OpenAI’s partnerships) raises critical questions about AI’s environmental impact and energy infrastructure requirements. As AI models grow exponentially larger, the industry faces mounting pressure to address sustainability concerns while meeting computational demands.
For AMD, this represents validation of its AI chip strategy and provides the revenue visibility needed to compete with Nvidia’s established ecosystem. The partnership could accelerate AMD’s AI chip development and attract other major AI companies seeking alternatives to Nvidia’s dominant position.
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Source: https://www.businessinsider.com/openai-amd-chips-deal-nvidia-ai-2025-10