AMD is dramatically escalating its challenge to Nvidia’s AI chip market dominance by announcing a massive partnership with OpenAI. The five-year agreement will see AMD supply six gigawatts (GW) worth of processors for OpenAI’s AI data centres, aiming to bolster the infrastructure needed for demanding applications like ChatGPT.
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The partnership kicks off with a 1 GW deployment of AMD Instinct MI450 GPUs in the second half of 2026. AMD’s stock price surged by 24% in pre-market trading following the announcement on Monday, with the company stating it expects the deal to deliver “tens of billions of dollars in revenue.”
This agreement follows closely on the heels of a “strategic partnership” OpenAI announced with Nvidia last month, which includes a letter of intent for Nvidia to deploy at least 10 GW of AI data centres and potentially invest up to $100 billion in OpenAI.
The language used by OpenAI in describing its partners hints at the competitive dynamics:
- Nvidia was designated the “preferred strategic compute and networking partner.”
- AMD is described as a “core strategic compute partner.”
Crucially, the AMD deal includes a unique incentive: OpenAI has the option to receive up to 160 million AMD shares—roughly a 10% stake in the company—at a minimal cost per share as specific milestones are achieved.
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The partnerships with both chipmakers come after a major adjustment to the exclusive deal between OpenAI and Microsoft in January, which freed OpenAI to secure compute power from other cloud providers.
OpenAI CEO Sam Altman praised the collaboration, stating, “This partnership is a major step in building the compute capacity needed to realize AI’s full potential. AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
AMD CEO Lisa Su echoed the sentiment, calling the partnership a “true win-win” that will enable “the world’s most ambitious AI buildout and advance the entire AI ecosystem.” These agreements are essential for OpenAI as the company continues to rapidly expand its infrastructure needs and navigates a potential path toward eventually going public.
