On Monday, Advanced Micro Devices and OpenAI signed a historic multibillion-dollar deal, establishing the chipmaker as a serious rival to Nvidia’s hegemony in the artificial intelligence space. AMD shares surged more than 25% in early trade as a result of the partnership’s unique provision for OpenAI to purchase up to 10% of AMD through a warrant structure.
Strategic Alliances Are Created by Deal Structure
Opening with a 1-gigawatt rollout of the MI450 series chips in the second half of 2026, OpenAI will implement 6 gigawatts of AMD Instinct graphics processing units across various hardware generations as part of the multi-year deal. With vesting linked to deployment milestones and AMD’s stock price projections reaching as high as $600 per share, AMD has granted OpenAI a warrant for up to 160 million shares of common stock at a price of one cent apiece.
Lisa Su, the CEO of AMD, stated, “We are excited to collaborate with OpenAI to deliver AI compute at massive scale.” “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster,” stressed OpenAI CEO Sam Altman.
Nvidia’s Market Dominance Is Under Attack
Nvidia’s estimated 80% market share in AI chips is directly challenged by the alliance. AMD’s 6-gigawatt transaction is a significant addition to OpenAI’s infrastructure strategy, as the company just two weeks ago announced a $100 billion deal with Nvidia to install 10 gigawatts of computing capacity.
According to AMD executives, the partnership would bring in over $100 billion in extra revenue from OpenAI and other clients over the course of four years, in addition to tens of billions of dollars in revenue annually. According to AMD CFO Jean Hu, the transaction will be “highly accretive to AMD’s non-GAAP earnings-per-share” and supports the company’s Instinct GPU roadmap after years of lagging behind Nvidia in the AI accelerator market.
As both companies strive to optimize their product roadmaps for large-scale AI deployments, the agreement strengthens a multi-generational hardware and software relationship that started with AMD’s MI300X CPUs and continued with the MI350X series.