OpenAI has entered into a multibillion-dollar partnership with AMD to secure 6 gigawatts of AI compute capacity, marking a significant diversification from its heavy reliance on Nvidia. Announced on October 6, 2025, the multi-year deal will see OpenAI deploy the first 1 gigawatt using AMD’s forthcoming Instinct MI450 GPUs starting in the second half of 2026, with AMD executives projecting tens of billions of dollars in annual revenue from the collaboration. For AI investors, hardware analysts, and tech strategists searching OpenAI AMD chip deal, AMD OpenAI 6GW GPUs, or OpenAI stake in AMD 2025, the agreement includes a warrant for OpenAI to acquire up to 160 million AMD shares (roughly 10% of the company) at one cent each, vesting as deployment milestones are met and share price targets hit. AMD’s shares skyrocketed over 30% in after-hours trading, adding $80 billion to its market cap, underscoring the deal’s transformative potential for the chipmaker in challenging Nvidia’s dominance. OpenAI CEO Sam Altman called it a “major step in building the compute capacity to realize AI’s full potential,” while AMD CFO Jean Hu projected “tens of billions” in revenue. The partnership, OpenAI’s latest in a series of massive compute deals, underscores the AI industry’s voracious demand for GPUs, with OpenAI’s infrastructure needs projected to consume gigawatts of power by 2026.
Deal Structure: 6GW Deployment with Equity Option
The agreement commits OpenAI to deploying 6 gigawatts of AMD’s Instinct GPUs across multiple generations, beginning with a 1GW rollout of the MI450 series in H2 2026. This positions AMD as a core strategic partner, diversifying OpenAI’s supply chain beyond Nvidia.
- Deployment Phases: Initial 1GW in 2026, scaling to 6GW over years; includes rack-scale AI solutions.
- Equity Warrant: Up to 160 million AMD shares (10% stake) at $0.01 each, vesting on milestones like deployment tranches and share price targets.
- Revenue Projection: Tens of billions annually for AMD, per CFO Jean Hu.
- Funding: OpenAI, valued at $500 billion with $4.3 billion H1 2025 revenue, will fund via cash burn ($2.5 billion H1) and partnerships.
AMD EVP Forrest Norrod: “This deal is transformative for the industry dynamics.”
| Phase | GW Deployment | Timeline | Vesting Trigger |
|---|---|---|---|
| Initial | 1GW (MI450) | H2 2026 | First Tranche |
| Scaling | Up to 6GW | Multi-Year | Share Price & Deployment Milestones |
Market Reaction: AMD Shares Soar 30% on Announcement
AMD’s stock (AMD) exploded over 30% in after-hours trading on October 6, 2025, adding approximately $80 billion to its market cap and closing the day up 23.71% at $152.34. The rally reflects investor enthusiasm for AMD’s challenge to Nvidia’s AI dominance, with the deal validating MI450’s competitiveness.
- Nvidia Context: Nvidia recently invested $100 billion in OpenAI for 10GW of GPUs, highlighting the circular AI economy where equity and compute intertwine.
- Broader Deals: OpenAI’s $300 billion Oracle cloud pact and $10 billion Broadcom custom chip agreement underscore its aggressive infrastructure scaling.
Implications: Diversifying AI Compute and Challenging Nvidia
The partnership is a coup for AMD and a hedge for OpenAI:
- Supply Chain Diversification: Reduces OpenAI’s 80% Nvidia reliance, mitigating shortages and costs.
- AMD’s Momentum: Builds on MI300X sales, positioning AMD for $50 billion+ AI revenue by 2027.
- Industry Dynamics: Intensifies GPU competition, potentially lowering prices and accelerating innovation.
As AI data centers consume 1,000 TWh globally by 2026, such deals are crucial for scaling.
Conclusion: OpenAI-AMD’s Multibillion Compute Alliance
OpenAI’s multibillion-dollar deal with AMD for 6GW of GPUs, with a 10% stake option, is a strategic diversification play, sending AMD shares soaring 30%. As OpenAI builds exascale infrastructure, it’s a win for the challenger. For AI hardware, it’s a power shift—will AMD erode Nvidia’s throne? The chips compute. Bloomberg
