ChatGPT Parent OpenAI, AMD Partner In Landmark AI Deal

Core Insights - Advanced Micro Devices (AMD) has entered a significant agreement with OpenAI to deploy up to 6 gigawatts of AMD Instinct GPU power for AI infrastructure [1][2] - The initial phase involves a 1-gigawatt rollout of AMD Instinct MI450 GPUs scheduled for the second half of 2026, with plans for further expansions [1][3] - AMD will be designated as a core compute partner for OpenAI, focusing on next-generation hardware and software development [2][3] Financial Implications - AMD issued OpenAI a warrant for up to 160 million shares, with vesting tied to deployment milestones, starting with the initial 1-gigawatt rollout [4] - AMD's CFO indicated that the partnership could generate "tens of billions of dollars in revenue" and significantly enhance AMD's adjusted earnings per share [5] - AMD's stock price surged by 33.59%, reaching $219.99, following the announcement [5][7] Competitive Landscape - This agreement comes in the wake of Nvidia's $100 billion commitment to OpenAI, which includes plans to deploy at least 10 gigawatts of its systems [6] - Nvidia's partnership is seen as a strategic move that could generate $300 billion to $500 billion in long-term revenue, intensifying competition for AMD [6][7] - Analysts note that Nvidia's collaboration strengthens its position in the AI market, increasing competitive pressure on AMD and other peers [6][7]