AMD, OpenAI sign Al chip-supply deal with option to take 10% stake

AMD said on Monday it will supply artificial intelligence chips to OpenAI in a multiyear deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10 per cent of the chipmaker.

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Shares of the chipmaker surged more than 34 per cent on Monday, putting them on track for their biggest one-day gain in over nine years and adding roughly $80 billion to the company's market value.

The latest deal, among a string of investment commitments, is a testament to OpenAI and the broader Al industry's voracious appetite for computing power as companies race toward developing Al technology that meets or exceeds human intelligence.

The deal offers OpenAI an opportunity to take a stake in one of Nvidia's most formidable rivals and is a major vote of confidence in AMD's AI chips and software.

"We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry," AMD executive vice president Forrest Norrod said.