AMD announced on Monday that it has entered a multi-year agreement to supply artificial intelligence chips to OpenAI. The deal, expected to generate tens of billions of dollars in annual revenue, also gives OpenAI the option to acquire up to roughly 10 percent of AMD.
The partnership allows OpenAI to invest in one of Nvidia’s main rivals while highlighting the growing demand for AMD’s AI chips and software. Following the announcement, AMD shares rose more than 23 percent in premarket trading.
AMD executive vice president Forrest Norrod told a news agency, “We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry.”
The agreement will see OpenAI deploy hundreds of thousands of AMD AI chips, equivalent to six gigawatts, starting in the second half of 2026. OpenAI will build a one-gigawatt facility using AMD’s upcoming MI450 series of chips, with revenue recognition beginning next year. AMD expects the deal to generate tens of billions of dollars annually and estimates more than $100 billion in new revenue over four years from OpenAI and other customers.
AMD strategy chief Mat Hein said, “Other people are going to come along with it because this is really the pioneer, a pioneer in the industry that has a lot of influence over the broader ecosystem.”
OpenAI CEO Sam Altman noted that the deal will help the company expand its AI infrastructure to meet growing demands.
As part of the arrangement, AMD issued a warrant giving OpenAI the option to buy up to 160 million AMD shares at 1 cent per share. The warrant vests in stages based on milestones, including initial shipment of MI450 chips and specific AMD stock price targets.
OpenAI has previously collaborated with AMD on older AI chip designs such as the MI300X. Alongside AMD, OpenAI continues to work with Nvidia, Microsoft, and other cloud providers, while also exploring development of its own AI-focused silicon. Analysts estimate AMD’s revenue this year will reach $32.78 billion, while OpenAI’s valuation stands at $500 billion.
The AMD deal does not alter OpenAI’s existing compute plans, including its ongoing partnership with Microsoft.
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