OpenAI Strikes Landmark Chip Deal with AMD to Power Next-Gen AI Infrastructure

In a transformative move for the artificial intelligence industry, OpenAI has signed a multi-year, multi-billion dollar agreement with chipmaker AMD to purchase advanced AI chips and build massive data centers. The deal marks a strategic shift in OpenAI’s approach to securing computing power, diversifying its reliance beyond Nvidia and positioning AMD as a key player in the race to power generative AI.

Under the terms of the agreement, OpenAI will deploy up to six gigawatts of AMD’s Instinct GPUs, beginning with a one-gigawatt rollout in the second half of 2026. These chips, starting with the forthcoming MI450 series, will be used to build large-scale AI data centers capable of supporting OpenAI’s expanding suite of models and services.

The partnership goes beyond a simple supply arrangement. AMD has issued OpenAI a warrant for up to 160 million shares—roughly 10% of the company—at just one cent per share. These shares will vest in tranches based on deployment milestones and AMD’s stock performance, with the final tranche unlocking if AMD’s share price hits $600.

AMD executives project the deal could generate tens of billions of dollars in annual revenue, with ripple effects potentially exceeding $100 billion over four years. The announcement sent AMD’s stock soaring more than 30%, marking its largest single-day gain in nearly a decade.

For OpenAI, the deal is part of a broader strategy to secure the compute capacity needed to scale its AI ambitions. CEO Sam Altman described the partnership as “a major step in building the compute capacity needed to realize AI’s full potential,” praising AMD’s leadership in high-performance chips.

This move also signals OpenAI’s intent to reduce its dependence on Nvidia, which has long dominated the AI chip market. While OpenAI recently signed a $100 billion letter of intent with Nvidia to deploy 10 gigawatts of systems, the AMD deal offers a more diversified and strategic alignment—including equity ownership and collaborative chip development.

OpenAI has a history of working with AMD, having provided input on earlier chip designs like the MI300X. The new agreement deepens that relationship, with both companies sharing technical expertise to optimize future product roadmaps. OpenAI is also developing its own custom silicon in partnership with Broadcom, further underscoring its commitment to building a robust and flexible compute ecosystem.

The AMD deal is expected to accelerate OpenAI’s infrastructure buildout, including the Stargate project—a $500 billion initiative to construct data centers across the U.S. by 2029. The first AMD-powered facility, a one-gigawatt installation, is set to begin construction next year.

In an industry where compute is king, this partnership represents a pivotal moment. It not only boosts AMD’s credibility as a viable alternative to Nvidia but also empowers OpenAI to scale its operations with greater agility and strategic control. As AI continues to reshape industries, the battle for chip supremacy is heating up—and OpenAI’s latest move could redefine the landscape.

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