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In the relentless race to build the computational backbone for artificial intelligence, OpenAI has just made its next major move. The company behind ChatGPT has struck a sweeping deal with chipmaker AMD, an agreement that could not only secure its next generation of processors but also give it a potential 10% stake in the hardware giant. This is the latest manoeuvre in OpenAI's staggering trillion-dollar push to expand its computing base.

The Deal and Its Immediate Market Impact

According to a Monday report from Quartz, OpenAI plans to integrate up to 6 gigawatts of AMD's advanced GPUs over several years. This phased deployment will commence in the latter half of 2026 and will continue until the 6-gigawatt goal is met.

The agreement includes a provision for AMD to grant OpenAI a warrant for up to 160 million shares. The ultimate size of OpenAI's stake, which could reach approximately 10% of AMD, is contingent on the volume of hardware used and the achievement of specific share price targets.

The announcement triggered a significant and swift response from the market. AMD's shares surged by as much as 37% during early Monday trading, eventually stabilising with a gain of over 26% soon after the opening bell. Meanwhile, its competitor Nvidia, despite its own recent $100 billion agreement with OpenAI, saw its shares dip by about 1.5% before recovering.

A Challenge to the Dominant Player

With this partnership, AMD positions itself as a more formidable competitor to Nvidia, the current leader in the accelerator chip market, which is essential for AI development. The competitive landscape is stark: Nvidia's data centre operations brought in over $115 billion in sales last year, whereas AMD's projected AI-related revenue for 2025 is around $6.5 billion.

The sheer scale of investment from companies like OpenAI now rivals the energy demand of major cities, according to analysts, highlighting the immense resources required to advance the field.

A 'Win-Win' for the AI Ecosystem

In a statement, OpenAI's chief executive, Sam Altman, described the new deal as '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'.

Echoing the sentiment, AMD's chief executive, Lisa Su, said, 'We are thrilled to partner with OpenAI to deliver AI compute at massive scale. This agreement creates a true win-win enabling the world's most ambitious AI buildout and advancing the entire AI ecosystem'.

AMD's chief financial officer, Jean Hu, further commented that the deal is 'expected to deliver tens of billions of dollars in revenue' for the company.

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