AMD's OpenAI Deal Predicted to Bring 'Tens of Billions' in Revenue
AMD has inked a major deal with OpenAI, with the chipmaker's CFO Jean Hu predicting 'tens of billions' in revenue. The partnership, which involves OpenAI taking a 10% stake in AMD, could make amd stock a strong alternative to Nvidia for AI infrastructure investments.
The deal sees OpenAI acquiring around 160 million shares in AMD, worth up to 6 gigawatts of AMD's GPUs. This stake will vest in tranches tied to GPU purchases and AMD's share price. The first tranche vests after 1 gigawatt of AMD Instinct MI450 GPUs are deployed, with full vesting requiring 6 gigawatts of purchases. Additionally, increasing share-price targets must be met, with the final tranche tied to a $600 per share threshold. The warrant is non-transferable except to affiliates, and issued shares are freely tradable.
AMD's stock has already seen a 25% rise following the announcement. CEO Lisa Su believes the partnership will propel the entire AI ecosystem forward. This deal comes amidst a flurry of activity in the chip industry, with Nvidia and Intel also striking significant OpenAI deals recently. The agreement begins with a 1 gigawatt purchase of AMD Instinct MI450 GPUs in the second half of 2026, marking a significant boost for AMD in the competitive GPU market.
AMD's partnership with OpenAI, predicted to bring in tens of billions in revenue, has already bolstered AMD's stock market today performance. With the deal vesting based on GPU purchases and share price targets, AMD stands to gain significantly from OpenAI's investment. As the deal commences with a 1 gigawatt GPU purchase in late 2026, AMD looks set to strengthen its position in the AI infrastructure market.
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