AMD Shares Surge on OpenAI Partnership for Next-Gen AI Chips
AMD's shares surged by over 30% following a significant partnership announcement. The tech giant has joined forces with OpenAI to supply next-generation processors for new AI data centres.
The collaboration, kicking off with AMD's 'MI450' chip in late 2026, aims to diversify OpenAI's hardware supply and reduce its reliance on Nvidia. OpenAI will receive performance-based warrants for up to 160 million AMD shares, contingent on hitting share price targets and deployment milestones.
This partnership is part of OpenAI's strategy to secure high-performance computing power and maintain a resilient supply chain. AMD expects tens of billions of dollars in annual revenue from this deal over the next five years. OpenAI is pursuing a multi-pronged hardware strategy, involving partnerships with AMD, Nvidia, and Broadcom, as well as purchasing computing capacity from Oracle.
The AMD-OpenAI partnership signals a shift in AI infrastructure deals, with customers gaining influence over technology roadmaps and potential financial stakes in suppliers. While AMD's entry into the AI data centre space validates its technology and expands its market reach, it does not immediately threaten Nvidia's dominance. OpenAI will acquire AMD chips either directly or through cloud partners like Microsoft and Oracle.
