<figure id="attachment_3176615" aria-describedby="caption-attachment-3176615" style="width: 1600px" class="wp-caption alignnone"><img loading="lazy" class="size-full wp-image-3176615" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/10/d2221918-amd-logo-06102025.webp" alt="" width="1600" height="1000" /><figcaption id="caption-attachment-3176615" class="wp-caption-text">Shares of AMD jumped more than 23% in premarket trading after the deal was announced. (EPA Images pic)</figcaption></figure>
SAN FRANCISCO: AMD said on Monday it will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.
The deal offers OpenAI an opportunity to take a stake in one of Nvidia&#8217;s most formidable rivals and is a powerful endorsement of Advanced Micro Devices&#8217; (AMD&#8217;s) AI chips and software.
Shares of AMD jumped more than 23% in premarket trading.
&#8220;We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry,&#8221; AMD executive vice president Forrest Norrod told Reuters on Sunday.
The agreement covers the deployment of hundreds of thousands of AMD&#8217;s AI chips, or graphics processing units (GPUs), equivalent to six gigawatts, over several years beginning in the second half of 2026.
AMD said OpenAI would build a one-gigawatt facility based on its forthcoming MI450 series of chips beginning next year and that it would begin to recognise revenue then.
AMD executives expect the deal to net tens of billions of dollars in annual revenue. Because of the ripple effect of the agreement, AMD expects to receive more than US$100 billion in new revenue over four years from OpenAI and other customers, they said.
&#8220;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,&#8221; AMD strategy chief Mat Hein said.
The deal with AMD will help OpenAI build enough AI infrastructure to meet its needs, OpenAI CEO Sam Altman said in a statement.
Analysts, on average, estimate AMD will generate revenue of US$32.78 billion this year, according to LSEG data.
As part of the arrangement, AMD issued a warrant that gives OpenAI the ability to buy up to 160 million shares of AMD for 1 cent each over the course of the chips deal. The warrant vests in tranches based on milestones that the two companies have agreed on.
The first tranche will vest after the initial shipment of MI450 chips set for the second half of 2026. The remaining milestones include specific AMD stock price targets that escalate to US$600 a share for the final instalment of stock to unlock.
AMD has 1.62 billion shares outstanding and is valued at US$267.23 billion, according to LSEG data. Its shares closed on Friday at US$164.67.
OpenAI has a valuation of US$500 billion.
OpenAI wants more GPUs
OpenAI has worked with AMD for years, providing inputs on the design of older generations of AI chips such as the MI300X.
The San Francisco-based AI company has been taking a number of steps to ensure it has the chips needed for its future needs.
In September, Nvidia announced an investment of up to US$100 billion in OpenAI that included a plan to supply at least 10 gigawatts&#8217; worth of Nvidia systems. The plan includes OpenAI deploying a gigawatt of Nvidia&#8217;s next-generation Vera Rubin chips in late 2026.
In addition to using Nvidia hardware, cloud computing giants such as Alphabet&#8217;s Google and Amazon build their own in-house processors.
Similarly, OpenAI is in the process of developing its own silicon for AI use and has partnered with Broadcom, Reuters reported last year.
OpenAI and its main backer Microsoft also announced last month that they had signed a non-binding agreement to restructure OpenAI into a for-profit entity, signalling further changes in the governance of the fast-growing AI company.
A person familiar with the matter said the deal with AMD does not change any of OpenAI&#8217;s ongoing compute plans, including that effort or its partnership with Microsoft.

MatchPoint Times

AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

The deal allows OpenAI to invest in Nvidia’s key rival AMD, signalling strong confidence in AMD’s AI chips and software.

Cops probing 2 officers over alleged misconduct in loan shark case

Ellron sahkan rakan sejawatan bersama GRS