AMD Shares Soar on Landmark OpenAI Partnership
AMD stock surged 37% in pre-market trading following a major deal with OpenAI. The agreement includes OpenAI deploying 6 gigawatts of AMD GPUs over multiple years, with OpenAI receiving warrants for up to 160 million AMD shares. The partnership is expected to generate $6.55 billion in AI GPU revenue and boost AMD's overall revenue beyond $100 billion. The first gigawatt rollout is set for the second half of 2026. This move comes in response to Nvidia's recent $100 billion investment in OpenAI, intensifying competition in the AI chip market.
*this image is generated using AI for illustrative purposes only.
Advanced Micro Devices Inc. (AMD) stock experienced a dramatic surge in pre-market trading following the announcement of a groundbreaking multi-billion dollar agreement with artificial intelligence powerhouse OpenAI. This partnership marks a significant milestone in the competitive landscape of AI chip manufacturing and deployment.
Deal Highlights
- Partnership Scale: OpenAI to deploy 6 gigawatts of AMD Graphics Processing Units (GPUs) over multiple years
- Equity Stake: OpenAI receives warrants for up to 160 million AMD shares, potentially representing a 10% stake
- Performance Milestones: Warrant conversion tied to specific achievements, including AMD's stock price reaching $600 per share
- Previous Closing Price: AMD stock closed at $164 before the announcement
Market Impact and Projections
| Metric | Value |
|---|---|
| Pre-market Stock Jump | 37.00% |
| Projected AI GPU Revenue | $6.55 billion |
| Expected Overall Revenue | Over $100 billion |
| First Gigawatt Rollout | Second half of 2026 |
The partnership is expected to be accretive from next year, with acceleration anticipated from 2027. AMD executives are optimistic that this deal will propel the company's overall revenue beyond the $100 billion mark.
Competitive Landscape
This strategic move comes just two weeks after AMD's competitor, Nvidia, announced a $100 billion investment in OpenAI for AI infrastructure and data centers with a 10 GW capacity. The AMD-OpenAI partnership appears to be a direct response to this, positioning AMD as a strong contender in the AI chip market.
Market Reactions
While AMD shares surged, the news had a ripple effect on the market:
- AMD: 37.00% increase in pre-market trading
- Nvidia: 1.50% decline in pre-market trading
This shift in market dynamics underscores the intensifying competition in the AI chip sector and highlights the growing importance of strategic partnerships with leading AI companies.
The AMD-OpenAI deal signifies a major leap forward for AMD in the AI market, potentially reshaping the competitive landscape of high-performance computing for artificial intelligence applications. As the first gigawatt of chips is set to roll out in the latter half of 2026, industry observers will be keenly watching how this partnership unfolds and its impact on the broader tech and AI ecosystems.
Investors and market analysts will likely be reassessing their projections for AMD's future performance in light of this transformative partnership. The agreement not only boosts AMD's position in the AI chip market but also aligns the company closely with one of the most prominent players in artificial intelligence research and development.
As the AI arms race continues to heat up, partnerships like these will play a crucial role in determining the leaders in next-generation computing technologies. The coming years will reveal how this collaboration influences AMD's market share, technological advancements, and overall standing in the highly competitive semiconductor industry.
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