Artificial intelligence firm OpenAI has signed a chip supply and infrastructure partnership with semiconductor maker AMD, marking a major step toward expanding its computing capacity to meet surging global AI demand, the companies announced Monday.

Under the agreement, OpenAI will purchase AMD’s latest high-performance graphics chips, the upcoming Instinct MI450, which is set to debut next year. The partnership will deliver 6 gigawatts of computing power for OpenAI’s next-generation AI infrastructure, with the first batch—worth 1 gigawatt—scheduled for deployment in the second half of 2026.

As part of the deal, AMD granted OpenAI a warrant to purchase up to 160 million shares, or about 10% of AMD’s common stock, based on the company’s 1.6 billion outstanding shares. The warrant will vest upon meeting milestones tied to the amount of computing power deployed and certain share price targets.

The agreement also gives OpenAI the option to acquire as much as a 10% stake in AMD, according to a joint statement.

Following the announcement, AMD’s shares surged nearly 24% on Monday, while Nvidia’s shares slipped 1% after months of record highs.

“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” OpenAI CEO Sam Altman said in a statement. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”

The deal represents a major boost for Santa Clara, California-based AMD, which has trailed its rival Nvidia amid the ongoing AI chip boom. It also reflects OpenAI’s strategy to diversify its chip supply chain and reduce reliance on Nvidia, whose dominance in the AI computing sector has made it the world’s most valuable company.

Last month, OpenAI and Nvidia announced a $100 billion partnership to expand data center capacity by at least 10 gigawatts. Hundreds of Nvidia’s high-powered GB200 systems are already being installed at OpenAI’s flagship Stargate data center under construction in Abilene, Texas.

Analysts at Barclays said the AMD deal underscores the sheer scale of AI’s computing needs rather than competition between chipmakers.

“The infrastructure required to meet AI demand largely doesn’t exist today,” Barclays analyst Tom O’Malley wrote in a note to investors. “But this is further proof that the ecosystem is desperate for more compute.”

Source: AP