AMD announced a transformative multi-year agreement with OpenAI to supply artificial intelligence (AI) chips, a deal expected to generate tens of billions of dollars in annual revenue. The arrangement also grants OpenAI the option to purchase up to roughly 10% of AMD’s shares, signaling one of the most significant partnerships in the AI hardware industry to date.

A Game-Changing Partnership in the AI Hardware Race

The deal positions OpenAI, the creator of ChatGPT, as a key partner and investor in one of Nvidia’s strongest competitors. It also serves as a major endorsement of AMD’s AI chip technology and software ecosystem.

“We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry,” said Forrest Norrod, Executive Vice President at AMD, in a statement to Reuters.

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Under the agreement, AMD will deploy hundreds of thousands of its AI graphics processing units (GPUs)—equivalent to six gigawatts—over the next several years, beginning in the second half of 2026.

OpenAI to Build One-Gigawatt Facility Using AMD Chips

As part of the rollout, OpenAI will construct a one-gigawatt data facility powered by AMD’s upcoming MI450 series of chips starting next year. AMD expects to begin recognizing revenue once this facility comes online.

Company executives estimate that the OpenAI partnership alone could yield tens of billions in yearly revenue. Additionally, they project more than $100 billion in new revenue over the next four years from OpenAI and related clients as the ripple effect of the collaboration spreads across the AI ecosystem.

“Other players in the industry will follow because OpenAI is a pioneer with significant influence,” said Mat Hein, AMD’s Chief Strategy Officer.

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OpenAI’s Expanding AI Infrastructure Ambitions

OpenAI CEO Sam Altman said the deal will help the company build enough AI infrastructure to meet its growing computational demands. The San Francisco-based firm has previously collaborated with AMD on earlier generations of chips, such as the MI300X.

The partnership comes amid OpenAI’s broader efforts to secure a reliable chip supply. In September, Nvidia announced plans to invest up to $100 billion in OpenAI and deliver 10 gigawatts of AI systems, including a gigawatt of its next-generation Vera Rubin chips by late 2026.

In parallel, OpenAI is also developing its own AI silicon in collaboration with Broadcom, while maintaining deep partnerships with cloud giants like Google, Amazon, and Microsoft, who are all investing heavily in in-house chip designs.

Deal Includes Stock Warrant for OpenAI

As part of the agreement, AMD has issued a warrant allowing OpenAI to buy up to 160 million AMD shares at $0.01 each, based on performance milestones. The first tranche will vest after the initial shipment of MI450 chips in the second half of 2026. Subsequent tranches are tied to AMD stock price targets, with the final one unlocking at $600 per share.

AMD currently has 1.62 billion shares outstanding and a market valuation of $267.23 billion, with shares closing at $164.67 on Friday. Analysts project AMD’s total revenue for 2025 at $32.78 billion, according to LSEG data.

OpenAI, valued at $500 billion, has also recently announced plans with Microsoft to restructure into a for-profit entity—another sign of its rapid expansion and strategic shift.

According to a person familiar with the matter, the AMD deal does not alter OpenAI’s existing compute roadmap or its partnership with Microsoft.