This article first appeared on GuruFocus.
Advanced Micro Devices (AMD, Financials) stock soared more than 35% the company announced a sweeping deal with OpenAI that could give Sam Altman’s startup a significant ownership stake.
The partnership will see OpenAI deploy up to 6 gigawatts of AMD’s Instinct GPUs over the next several years. The first phase a 1-gigawatt rollout begins in late 2026. AMD called it one of the largest GPU deployment agreements the industry has seen so far.
To seal the deal, AMD issued OpenAI a warrant to buy up to 160 million AMD shares. The stock vests as the partnership hits key milestones, such as deployment targets and share price thresholds. If OpenAI exercises the full warrant, it would own roughly 10% of AMD’s outstanding shares.
OpenAI said the agreement is worth billions, though neither side disclosed an exact figure. The arrangement helps OpenAI diversify its chip supply at a time when Nvidia dominates the AI hardware market. Nvidia shares slipped about 1% on the news.
For AMD, the deal marks a turning point. After years trailing Nvidia in the AI accelerator space, it now has OpenAI one of the biggest names in generative AI as a flagship customer. CEO Lisa Su said the partnership advances AMD’s role in building the infrastructure powering AI’s next wave.
The agreement comes just two weeks after OpenAI signed a $100 billion equity-and-supply deal with Nvidia and began talks with Broadcom to build custom chips. Together, these moves are part of OpenAI’s trillion-dollar infrastructure buildout, which includes new data centers across Texas, New Mexico, and the Midwest.
Investors will be watching whether this momentum carries through AMD’s next earnings report, when the company is expected to give an update on GPU shipments and demand.