Billion-dollar deal strengthens AMD in the AI chip market

A multibillion-dollar chip alliance is causing a stir in the semiconductor industry: U.S. chipmaker AMD has received a long-term order from ChatGPT developer OpenAI to supply high-performance processors. The deal is worth tens of billions of dollars and is set to be implemented in the second half of 2026. The plan involves delivering hundreds of thousands of specialized artificial intelligence processors, enabling OpenAI to massively expand its computing infrastructure. For AMD, the agreement promises substantial additional revenue and strengthens the company’s position in its competition with industry leader Nvidia.

As part of the deal, OpenAI has the option to purchase up to 160 million AMD shares if certain price targets are met. One milestone is a stock price increase to over 600 dollars. Recently, the shares were trading at around 165 dollars. AMD considers the contract a decisive step for the future of the AI market. Executive Forrest Norrod described it as a turning point for the entire industry. Marketing chief Mat Hein emphasized the deal’s signal effect, saying it could serve as a model for other major orders. AMD expects more than 100 billion dollars in additional revenue in the coming years due to growing demand for AI chips.

With this large-scale order, OpenAI aims to build urgently needed computing capacity for the development and operation of new AI systems. The company plays a key role in the U.S. “Stargate” megaproject, which involves constructing numerous data centers for artificial intelligence. Just two weeks ago, OpenAI announced a comprehensive partnership with Nvidia, which includes chip deliveries as well as an investment of up to 100 billion dollars. The new deal with AMD further expands the network of technology partnerships. OpenAI is currently valued at around 500 billion dollars.

For many tech companies, reducing dependence on Nvidia is a central strategic objective. Alongside OpenAI, Meta, Amazon Web Services, Google, and Microsoft are also working to develop alternative suppliers and their own chips. OpenAI is additionally collaborating with Broadcom in this field and has been providing AMD with technical feedback for years to help develop new processors. These insights have contributed to products such as the MI300X model. With this strategy, AMD aims to strengthen its position in the lucrative AI chip market, where Nvidia has so far dominated with a market valuation of 4.6 trillion dollars. AMD’s market capitalization stands at around 267 billion dollars, and its stock price rose significantly in premarket trading after the deal was announced.