OpenAI, the operator of ChatGPT, and AMD have entered a new partnership to create new data centers powered by AMD’s chips.
The AI arms race turned a new page Monday as chipmaker Advanced Micro Devices Inc. and ChatGPT operator OpenAI announced a partnership to collaborate on construction of AI data centers powered by AMD chips.
The deal could also see OpenAI take a roughly 10% stake in AMD, which employs about 3,700 people in Austin. Shares in the California-based chipmaker soared nearly 38%.
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“It’s a big deal for us, for our shareholders and our teams.” AMD CEO Lisa Su, who lives in Austin, said in an interview with Bloomberg Television.
The companies did not provide an estimated total value for the agreement, but Su told The Wall Street Journal the deal will generate tens of billions of dollars in new revenue for AMD over the next five years.
Lisa Su, CEO of Advanced Micro Devices, in 2019.
“This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem,” she said in a statement.
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OpenAI co-founder and CEO Sam Altman echoed that.
“AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster,” he said in a statement.
Sam Altman, co-founder and CEO of OpenAI, said his company’s new partnership with AMD “will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
The deal calls for OpenAI to buy the latest version of AMD’s high performance graphics chips, the Instinct MI450, which is expected to debut next year. It will supply 6 gigawatts of computing power for OpenAI’s “next generation” AI infrastructure, with the first batch of chips worth 1 gigawatt to be deployed in the second half of 2026.
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AMD also issued OpenAI a warrant allowing the AI startup to buy up to 160 million shares of AMD’s common stock. That amounts to about 10% of the chipmaker based on AMD’s 1.6 billion outstanding shares. The warrant will vest based on two milestones tied to the amount of computing power deployed and unspecified “share-price targets.”
Monday’s deal is about half the size of the one OpenAI reached last month with Nvidia Corp., when the companies announced a $100 billion partnership that will add at least 10 gigawatts of data center computing power. OpenAI and its partners have already installed hundreds of Nvidia’s GB200, a tall computing rack that contains dozens of specialized AI chips within it, at the flagship Stargate data center campus under construction in Abilene.
An entrance to the Advanced Micro Devices Inc. headquarters in Santa Clara, Calif.
Though a clear boost for AMD, the deal hints at OpenAI’s desire to diversify its supply chain away from Nvidia’s dominance. The AI boom has fueled demand for Nvidia’s graphics processing chips, sending its shares soaring and making it the world’s most valuable company. They fell about 1% Monday, though, the company’s dominant position in the ongoing AI infrastructure buildout somewhat undermined by the deal.
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AMD has had a fairly significant presence in Austin since 1979. It has several operations in the city and is currently expanding its Southeast Austin facility.
Barclays analysts said in a note to investors Monday that OpenAI’s AMD deal is less about taking share away from Nvidia than it is a sign of how much computing is needed to meet AI demand.
“We realize there will be delays with these deals, and that the infrastructure required largely doesn’t exist today, but we would again highlight this as a proof point that the ecosystem is desperate for more compute,” the Barclays analysts wrote.
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Shares in AMD finished the day up nearly 24% to close at $203.71. Nvidia was down 1.1% to 185.54. OpenAI is privately held.