In a surprising twist in the artificial intelligence (AI) chip wars, Nvidia (NVDA) CEO Jensen Huang expressed astonishment over rival Advanced Micro Devices’ (AMD) decision to grant OpenAI up to a 10% ownership stake as part of their newly announced multibillion-dollar partnership. Speaking on CNBC’s “Squawk Box,” Huang described the move as “imaginative” and “unique,” but said he was surprised that AMD would “give away 10% of the company before they even built” the next-generation product. The announcemen ...

Core Insights - OpenAI and AMD have signed a multibillion-dollar chip deal, allowing OpenAI the option to acquire a 10% stake in AMD, reflecting strong confidence in AMD's AI capabilities [1][3] - AMD's stock surged over 30%, adding approximately $80 billion to its market capitalization following the announcement [1] - The deal is seen as transformative for AMD and the broader industry dynamics, highlighting the increasing demand for AI computing power [2][3] Company Developments - The agreement involves the deployment of hundreds of thousands of AMD's AI chips, equivalent to six gigawatts, starting in the second half of 2026, which is comparable to the energy needs of 5 million US households [4] - AMD issued a warrant allowing OpenAI to purchase up to 160 million shares at 1 cent each, with expectations of generating tens of billions in annual revenue from the deal [5] - AMD anticipates over $100 billion in new revenue over four years from OpenAI and other customers due to the ripple effect of this agreement [5] Industry Context - The deal underscores the AI industry's significant appetite for computing power, as companies strive to develop advanced AI technologies [3] - OpenAI's CEO, Sam Altman, indicated that access to computing power is the primary constraint on the company's growth [3] - The partnership with AMD is expected to enhance OpenAI's infrastructure capabilities, although funding details for the deal remain unclear [7]