OpenAI Secures Major GPU Deal with AMD, Gains Option to Acquire Shares
OpenAI has announced a strategic partnership with AMD, securing a significant GPU contract and the option to acquire shares. This move comes amidst intensifying chip wars and OpenAI's rapid capital expenditure.
OpenAI, known for its AI developments like ChatGPT, has adopted a dual-supplier strategy with AMD and Nvidia to hedge against GPU shortages and market risks. The company has secured a 6 gigawatt GPU contract with AMD, its largest AI deal to date. This partnership, led by OpenAI CEO Sam Altman, gives the AI company the option to acquire up to 160 million AMD shares, roughly 10% of the company.
AMD, under the leadership of CEO Lisa Su, will deliver its next-generation Instinct MI450 chips to OpenAI starting in late 2026. The company projects tens of billions in revenue from this partnership over the next four years. AMD's shares surged to their highest price in at least a year and a half, up over 25% on the day, following the announcement. Meanwhile, Nvidia fell 1% on the news. AMD shares closed at $207, up from Friday's close of $164.67.
The broader chip wars are heating up, with companies like Google, Amazon, and OpenAI developing custom chips. However, AMD's ROCm software platform remains a challenge for AI developers, despite the MI450 series' competitive specs.
OpenAI's partnership with AMD reflects a strategic move to secure GPU supply and potentially gain a significant stake in the company. While AMD stands to gain substantial revenue, the deal also signals OpenAI's commitment to its AI developments, despite projected billion-dollar losses in 2025. The chip wars continue to intensify, with major players vying for dominance in the AI market.
