AMD signs AI chip supply deal with OpenAI; shares surge 34%

AMD will supply artificial intelligence (AI) 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% of the chipmaker.

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Shares of the chipmaker surged more than 34% 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 deal, the latest in a string of investment commitments, underscores OpenAI and the broader AI industry’s voracious appetite for computing power as companies race toward developing AI technology that meets or exceeds human intelligence.

“We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry,” AMD Executive Vice-President Forrest Norrod told Reuters on Sunday.

VOTE OF CONFIDENCE

The agreement closely ties the startup at the center of the AI boom to AMD, one of the strongest rivals of Nvidia, which recently agreed to make substantial investments in OpenAI.

Analysts said it was a major vote of confidence in AMD’s AI chips and software but is unlikely to dent Nvidia’s dominance, as the market leader continues to sell every AI chip it can make.

It covers the deployment of hundreds of thousands of AMD’s AI chips, or graphics processing units (GPUs), equivalent to six gigawatts, over several years beginning in the second half of 2026. This is roughly equivalent to the energy needs of 5 million US households, or about thrice the amount of power produced by the Hoover Dam.