OpenAI Invests in AMD, Secures 6 Gigawatt Chip Deal, Five-Year Partnership Worth Tens of Billions of Dollars

News Summary

OpenAI and AMD announced a strategic partnership agreement on October 6, 2025. OpenAI will deploy 6 gigawatts (GW) of AMD GPUs over the next several years, with the initial deployment of 1 GW of AMD Instinct MI450 series GPUs set to begin in the second half of 2026. As part of the agreement, AMD issued warrants for up to 160 million shares of its common stock to OpenAI, representing approximately 10% of AMD's shares, which will vest in tranches upon the achievement of specific milestones. This collaboration is seen as a direct challenge to Nvidia's dominant position in the AI chip market.

Unprecedented Scale of Collaboration

Under the terms of the multi-year agreement, AMD will supply hundreds of thousands of AI chips to OpenAI, with OpenAI committing to procure 6 GW worth of AMD chips. This strategic partnership begins with the AMD Instinct MI450 series and rack-scale AI solutions, and will extend to future generations of products. OpenAI can purchase these chips directly or through its cloud computing partners.

AMD CEO Dr. Lisa Su stated that this deal is expected to generate tens of billions of dollars in new revenue for AMD over the next five years. AMD CFO Jean Hu commented that the partnership with OpenAI is projected to bring tens of billions of dollars in revenue to AMD while accelerating OpenAI's AI infrastructure development. This agreement is expected to create significant strategic synergy and shareholder value for both parties and is anticipated to be highly accretive to AMD's non-GAAP earnings per share.

Equity Incentive Aligns Mutual Interests

AMD has issued warrants for up to 160 million shares of AMD common stock to OpenAI to further align strategic interests. These warrants will vest upon the achievement of specific milestones. The first tranche of shares will vest upon the completion of the initial 1 GW deployment. As the procurement scales up to 6 GW, additional tranches of shares will vest. Vesting is also tied to AMD achieving specific stock price targets and OpenAI realizing the technical and commercial milestones required for large-scale deployment of AMD technology.

Following the announcement of this deal, AMD's stock price surged over 23% in Monday's trading, adding approximately 100 billion RMB to its market capitalization in a single day, demonstrating strong market approval for this collaboration.

Challenging Nvidia's Dominance

Currently, Nvidia holds a dominant position in the AI chip market. Nvidia's data center division generated over $115 billion in sales last year, while AMD's AI-related revenue is projected to reach approximately $6.5 billion in 2025. This partnership with OpenAI is widely regarded by the industry as AMD's most direct challenge to Nvidia in the AI chip market.

Sam Altman, co-founder and CEO of OpenAI, stated that this collaboration is a crucial step in building the computing power needed to unlock AI's full potential. AMD's leadership in high-performance chips will enable them to accelerate progress and bring the benefits of advanced AI to everyone faster.

Deepening Technical Collaboration Roadmap

Under this definitive agreement, OpenAI will partner with AMD as a core strategic computing partner to drive the large-scale deployment of AMD technology, starting with the AMD Instinct MI450 series and rack-scale AI solutions, and extending to future generations of products. By sharing technical expertise to optimize their respective product roadmaps, AMD and OpenAI are deepening multi-generational hardware and software collaboration that began with the MI300X and continues with the MI350X series.

Dr. Lisa Su, AMD CEO, expressed that the company is thrilled to partner with OpenAI to deliver AI computing at scale. This collaboration combines the strengths of AMD and OpenAI, creating a true win-win situation that will enable the world's most ambitious AI endeavors and drive the growth of the entire AI ecosystem.

Context of OpenAI's Computing Power Needs

As an AI application giant valued at over $500 billion, OpenAI has an extremely strong demand for computing power. This large-scale partnership with AMD reflects OpenAI's proactive efforts to secure the hardware resources necessary for its expansion. Through a diversified chip supplier strategy, OpenAI can not only reduce its reliance on a single vendor but also gain greater negotiation leverage in terms of pricing and supply.

This strategic partnership marks a new phase in AI infrastructure development and signals significant changes in the competitive landscape of the AI chip market. With this collaboration, AMD is poised to secure a more prominent position in the rapidly growing AI chip market.