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- AMD stock surged on Monday on news of a major AI deal.
- The semiconductor company announced a multi-year deal to provide chips to OpenAI.
- The deal puts AMD in a better spot to compete with Nvidia, which also recently inked a deal with OpenAI.
The move: AMD stock surged 35% on Monday to $223.50 ahead of the opening bell, rebounding after it fell 3% on Friday. The semiconductor producer was up 36% year-to-date through Friday’s close.
Why: On Sunday, AMD announced that it signed a multi-year agreement with OpenAI to provide AI chips to the ChatGPT maker, specifically advanced graphics processing units.
The chipmaker will deploy its AMD Instinct GPUs to help power OpenAI’s fast-growing infrastructure, with the first deployment scheduled for the second quarter of 2026. In total, all the AMD chip deployments will extend 6 gigawatts of power to OpenAI, across multiple generations of AI infrastructure.
“Under this definitive agreement, OpenAI will work with AMD as a core strategic compute partner to drive large-scale deployments of AMD technology starting with the AMD Instinct MI450 series and rack-scale AI solutions and extending to future generations,” AMD noted in a statement.
The deal also gives OpenAI the option to take a 10% stake in AMD. The chipmaker has issued it a warrant for 160 million shares of AMD common stock, which will vest as they reach certain milestones.
What it means: This news follows a deal between OpenAI and Nvidia, in which the chip giant will provide OpenAI with hardware to build new data facilities as part of a $100 billion investment.
The blockbuster deal was thought to be a bearish development for AMD, elevating its top competitor, Nvidia, in its partnership with the face of the AI boom in recent years.
However, with AMD’s own OpenAI deal in the books, the chip maker is in a better competitive position, with its tech getting a major endorsement from the top AI developer.
“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” OpenAI CEO Sam Altman said. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
