Chipmaker AMD and ChatGPT operator OpenAI have signed a multimillion-dollar deal.
(The Post News)– On Monday, chipmaker Advanced Micro Devices Inc. (AMD) and the operator of ChatGPT, OpenAI, disclosed a collaboration in which they will build Artificial Intelligence (AI) data centers using AMD chips. The collaboration marks a fresh and significant shift in the AI arms race.
As part of the agreement, OpenAI may obtain about 10% of shares in AMD, employing about 3,700 individuals in Austin. Meanwhile, the chipmaker’s shares in California soared by almost 38%.
AMD CEO Lisa Su told the media that the deal is important for the company, their “shareholders and team.” Though the companies did not reveal the agreement’s total estimated value, Su revealed to the media that it will bring in tens of billions of dollars for AMD over the coming five years.
Moreover, according to Su, by combining the greatest aspects of AMD and OpenAI, the collaboration enables the “most ambitious AI buildout” in the world and enhances the AI ecosystem as a whole.
On the other hand, OpenAI co-founder and CEO Sam Altman echoed the same sentiments. He noted that AMD’s domination in high-performance chips allows OpenAI to move more quickly and supply the advantages of cutting-edge AI to everyone.
The agreement stipulates that OpenAI will purchase AMD’s most recent high-performance graphics processors, the Instinct MI450, which are anticipated to debut in 2026. It will provide OpenAI with six gigawatts of processing capacity—the first set of chips, weighing one gigawatt, is set to be installed in the second half of 2026.
Additionally, AMD gave OpenAI a warrant that would enable the AI company to purchase up to 160 million shares of AMD stock, which represents roughly 10% of the chipmaker. The warrant will become effective upon meeting two milestones related to computing power deployment and undisclosed “share-price targets.”
Deal Poses a Threat to NVDA
The deal announced on Monday poses a serious threat to Nvidia’s (NVDA) domination. As the leading AI chipmaker over the years, NVDA has grown to become the most lucrative public corporation in the world, with a $4.6 trillion market value. Meanwhile, OpenAI recently made headlines with the release of its groundbreaking video generator, Sora 2.
NVDA agreed to begin chip deliveries in the coming year as part of a $100 billion deal that was announced by the two companies two weeks ago. Altman noted in a post on X that the AMD partnership is “incremental” to OpenAI’s work with NVDA. Altman also said that OpenAI intends on increasing its NVDA purchases.
However, with AMD not slouching, OpenAI had to hedge its bets because of the enormous demand for AI computer capacity. Meanwhile, following OpenAI and AMD’s partnership announcement, NVDA saw a decline in stock.
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