AMD and OpenAI Sign Strategic AI Chip Deal with Equity Option

Published: 08 Oct 2025

Author: Precedence Research

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The tech giant OpenAI received an offer from the AMD company for Artificial Intelligence chip supply, including 10% stake options to purchase from AMD's annual revenue, as part of a multi-year deal that is expected to generate huge revenue in the tens of billions of dollars. Amid this, AMD shares surged more than 34% to reach a more than one-year high of USD 226.71, adding USD 80 billion to its market capitalization.

According to the latest deal, this deal is a testament to OpenAI as compared to other series of investments, commitments. It offers a broader perspective for the AI industry to invent different ways of computing power, as several companies are moving towards the development of AI technology that exceeds the intelligence level of humans to meet evolving needs to stay competitive. According to this arrangement, AMD issued a warrant that grants OpenAI the right to purchase nearly 160 million shares of AMD at 1 cent each over the duration of the deal for AI chips.

This deal presents an incredible opportunity for OpenAI, as AMD is Nvidia’s most formidable rival, which further bolsters AMD’s confidence in staying at the forefront in providing AI chips and software. By evaluating the whole scenario, AMD executive vice president Mr. Forrest Norrod said, “We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry.”

This agreement includes the deployment of hundreds of thousands of AMD AI chips and GPUs, with a combined power consumption of six gigawatts, over several years, commencing at the start of 2026. This is approximately equivalent to the energy required for 5 million U.S. households.

OpenAI plans to build a one-gigawatt facility by leveraging its upcoming MI450 series of chips within the next year, and it is expected to begin generating revenue thereafter. Due to the ripple effect of this agreement, AMD is likely to receive more than USD 100 billion in new revenue over the next four years from OpenAI and other consumers. AMD strategy chief Mat Hein mentioned, “Other people are going to come along with it because this is really the pioneer, a pioneer in the industry that has a lot of influence over the broader ecosystem.”