OpenAI lifts another AI laggard with big plans for AMD

Core Insights - OpenAI has entered into a multiyear partnership with Advanced Micro Devices (AMD), which is expected to position AMD as a key player in the artificial intelligence sector [1][2] - AMD's shares surged over 30% following the announcement of OpenAI's plan to acquire up to a 10% stake in the company [2] - The partnership involves OpenAI purchasing AMD's AI chips for data centers, with an initial deployment of one gigawatt of power expected to begin in the second half of 2026 [3] Company Developments - OpenAI will acquire a warrant to purchase up to 160 million shares of AMD common stock at a low price of $0.01, representing about 10% of AMD [4] - The stock acquisition is structured as a multiyear commitment, with vesting tied to specific milestones related to AMD's share-price targets and the scale of chip purchases [5] - The deal is projected to generate tens of billions of dollars in revenue for AMD [5] Industry Context - The partnership is seen as a significant step in enhancing the compute capacity necessary for realizing the full potential of AI [4] - Global spending on artificial intelligence infrastructure is anticipated to reach $375 billion by 2025 [6] - The demand for large-scale AI data centers, which utilize specialized chips like graphics processing units, is increasing as the race to develop artificial general intelligence intensifies [7][8]