OpenAI Secures 10% AMD Stake Option in Massive 6 GW AI Chip Partnership
The recent partnership between Advanced Micro Devices (AMD) and OpenAI is a multi-billion-dollar, multi-year strategic agreement focused on advancing AI infrastructure and challenging Nvidia’s dominance in the AI chip market.
The deal, announced on October 6, 2025, positions AMD as a core strategic compute partner for OpenAI. It underscores the immense and growing demand for computing power needed to fuel advanced generative AI models.
Key Deal Contours
- Chip Supply: OpenAI has committed to deploying up to 6 gigawatts (GW) of AMD’s high-performance Instinct GPUs, starting with the forthcoming MI450 series.
- Deployment Timeline: The first 1 GW deployment of the MI450 chips is expected to begin in the second half of 2026.
- Financial Impact for AMD: The agreement is projected to generate tens of billions of dollars in annual revenue for AMD, with company executives anticipating over $100 billion in new revenue over four years from OpenAI and other customers who may follow suit.
- Equity Option: To further align strategic interests, AMD issued OpenAI a warrant allowing the AI company to purchase up to 160 million shares of AMD common stock—amounting to approximately a 10% stake in the chipmaker.
- Vesting Milestones: The vesting of the shares is tied to specific performance metrics, including the scale of GPU deployments (up to the full 6 GW) and AMD achieving certain share-price targets, escalating to $600 per share for the final tranche.
- Collaboration: The partnership involves deep, multi-generational hardware and software collaboration, with OpenAI providing technical expertise to help shape the design of future AMD chips for advanced AI workloads.
Industry and Strategic Implications
The deal is widely considered “transformative” for AMD, as it:
- Diversifies OpenAI’s Supply: It significantly cuts OpenAI’s heavy reliance on Nvidia, which currently holds an estimated 80% market share in AI accelerators. This move for diversification is crucial for securing a long-term, resilient supply chain for OpenAI’s voracious AI compute needs.
- Challenges to Nvidia’s Dominance: By deploying AMD’s Instinct GPUs at this scale, OpenAI is offering a major vote of confidence in their competitiveness, pressuring Nvidia to compete not only on technology but also on pricing and supply.
- Boosts AMD’s AI Standing: The massive contract and the strategic equity alignment validate AMD’s substantial investment in its Instinct GPU line and its ROCm software ecosystem.
The partnership with AMD is incremental to OpenAI’s existing and future relationship with Nvidia, as CEO Sam Altman stated, “The world needs much more compute.” OpenAI and Nvidia recently announced their own major deal for at least 10 GW of computing power.
