AMD Stock Surges 27% on OpenAI Deal Worth Up to $100B
AMD's stock soared by over 27% following the announcement of a significant agreement with OpenAI. The tech giant has secured a substantial deal with AMD, set to generate billions in revenue over the coming years.
The agreement allows OpenAI to acquire up to 10% of AMD's shares by purchasing up to 160 million shares over the next few years. This option is contingent on OpenAI achieving specific performance targets. The collaboration begins in 2026 and is set to run for at least 6 gigawatts, including several generations of AMD Instinct.
AMD will supply new Helios Racks to OpenAI, with the initial step including 1 gigawatt of computing capacity. The collaboration involves the construction of gigawatt-scale data centers equipped with Instinct MI450. AMD has issued a warrant to OpenAI, enabling them to buy up to 160 million shares of AMD for 1 cent each over the course of the chips deal. This deal could potentially generate up to $100 billion in revenue for AMD.
The warrant vests in tranches based on milestones agreed upon by OpenAI and AMD. OpenAI will purchase up to 160 million new shares of AMD, with the price tied to specific goals and not directly redeemable. This strategic partnership is expected to significantly boost AMD's revenue and strengthen its position in the market.
