Openai celebrated and supported another tech company on Monday, signing a deal with Chipmaker Advanced Micro Devices, becoming one of the hot companies hoping investors are at the forefront of the artificial intelligence boom.
AMD shares have skyrocketed over 30% after the company behind ChatGpt said it was planning to acquire up to 10% stake in the chip maker. This shows the latest example of Sam Altman's multi-billion dollar contract production frenzy. This is reshaping the American chip industry, where startups seem to have the power to pick new winners, revive the delays and move public markets through partnerships.
According to a multi-year deal, Openai will buy AMD's AI chips and AMD's AI chips that can pull out a total of 6 gigawatts of power and run the chips. The first 1 Gigawatt deployment will begin in the second half of 2026 with the AMD Instinct MI450 GPU.
“This partnership is a major step in building the computing power needed to fully realize the potential of AI,” OpenAI CEO Altman said in a news release. “AMD's leadership on high-performance chips will help accelerate progress and make the benefits of advanced AI faster for everyone.”
Openai has received a warrant to purchase up to 160 million shares of AMD common stock, which is approximately 10% of Chipmaker. Stock acquisitions are not made at once, and are designed as a multi-year commitment, allowing Openai to buy AMD stocks at a low price of $0.01.
Stocks are only entitled by achieving certain milestones tied to AMD reaching certain stock targets, if Openai continues to buy and deploy AMD chips at scale. According to a news release, the first equity tranche will feature the first 1 gigawatt deployment and will be granted an additional tranche as purchases will expand to up to 6 gigawatts.
The transaction is expected to bring hundreds of billions of dollars to AMD's revenue.
“This partnership brings the best of AMD and Openai, creating a true win-win, enabling the world's most ambitious AI build-out, and moving the entire AI ecosystem forward,” said Dr. Lisa Su, AMD Chairman and CEO.
Globally, businesses are expected to spend $375 billion on artificial intelligence infrastructure in 2025.
The race to build artificial general information – a hypothetical AI system capable of performing all cognitive tasks performed by humans – has begun the need to build a large AI data center that houses specialized chips called graphics processing units.
Nvidia is a leading provider of graphics chips like this, commanding 70% of AI chip sales. However, as demand for different types of AI workloads increases, both startups and legacy rivals are looking to offer a more affordable alternative to Nvidia's chips.
Altman repeatedly spoke about the chip shortage, and earlier this month he signed a $100 billion deal with Broadcom to design custom AI chips, aiming to diversify Openai's chip supply.
Openai is currently valued at $500 billion, with 700 million people weaker than active users.
Altman is looking to invest billions of dollars of computing resources to support Openai's efforts to win AI races. In January, Openai, along with Japanese investor SoftBank and database provider Oracle, committed $100 billion to build AI infrastructure in the US. As part of the Stargate Project, the company plans to invest $500 billion over the next four years.
I signed Openai transaction In May, a 1 gigawatt data center complex was built in the United Arab Emirates. This is a transaction mediated by the Trump administration. G42, an Emirati AI company supported by Oracle, Nvidia, Softbank, Cisco and Royals, is planning to set back the project.
