Introduction
The global AI chip race hit a new turning point on October 6, 2025. AMD stunned the semiconductor world with a multi-year AI chip deal with OpenAI, worth more than $100B .
The deal is historic: AMD expects to generate more than $100 billion in revenue over the next four years, while OpenAI gains the option to acquire up to a 10% stake in AMD at a token price. Investors cheered instantly—AMD shares surged more than 23% in premarket trading, hitting their highest level since March 2024.
Let’s break down the five facts you must know about this landmark deal.
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5-Point Overview: AMD-OpenAI Historic AI Chip Deal
Massive AI Chip Supply: AMD will provide hundreds of thousands of MI450 GPUs to OpenAI starting in 2026, equivalent to six gigawatts of compute.
$100 Billion Revenue Potential: The deal is projected to generate tens of billions annually, totaling over $100B over four years, including ripple effects from other customers.
OpenAI Equity Option: OpenAI can acquire up to 10% of AMD shares at $0.01 each, vesting through milestones tied to chip deliveries and stock targets.
Stargate Project Integration: Chips from AMD will support OpenAI’s role in the $500B U.S.-backed Stargate AI infrastructure initiative, including a 1-gigawatt data center.
Challenge to Nvidia Dominance: OpenAI diversifies its GPU supply, signaling AMD’s rise as a competitor to Nvidia while strengthening U.S. AI chip leadership.
1. The OpenAI $100B AI chip deal That Could Redefine AMD
AMD’s agreement with OpenAI is the company’s largest AI chip deal ever. The contract includes hundreds of thousands of AMD GPUs, beginning with the MI450 series in 2026.
Executives said the deal alone could bring in tens of billions of dollars in annual revenue. Beyond OpenAI, AMD expects ripple effects across the industry, pushing its total additional revenue to $100 billion over four years.
For a company often seen as an underdog in the AI race, this is a defining moment. It places AMD shoulder-to-shoulder with Nvidia, whose chips have powered most AI models to date.
“We view this deal as transformative, not just for AMD but for the dynamics of the industry,” said Forrest Norrod, AMD’s executive vice president.
2. The 10% Stake Twist: OpenAI as a Customer and Shareholder
What makes this deal extraordinary is the equity option. AMD issued a warrant to OpenAI that allows the AI company to buy up to 160 million AMD shares for just one cent each.
That equals nearly 10% of AMD’s current outstanding shares. However, this windfall isn’t automatic. The warrant vests in tranches based on milestones:
- Delivery of the first MI450 chips in 2026.
- AMD hitting certain stock price targets, scaling up to $600 per share.
If unlocked fully, OpenAI could become one of AMD’s largest shareholders, making it a unique customer-investor hybrid relationship.
3. Powering the $500 Billion Stargate Project
This partnership also ties directly into Stargate, a $500 billion AI infrastructure project supported by the Trump administration.
As part of the agreement, OpenAI will construct a 1-gigawatt data center in 2026 based on AMD’s MI450 GPUs. Over the contract’s lifetime, AMD will deliver systems totaling six gigawatts of compute capacity.
For context, one gigawatt can power hundreds of thousands of homes. In AI terms, it represents a staggering amount of compute—fueling model training, inference, and scaling AI services to billions of users.
This deal cements AMD’s place in the geopolitical race for AI infrastructure, alongside Nvidia and major cloud providers like Google and Amazon.
4. A Direct Challenge to Nvidia’s AI Dominance
For years, Nvidia has been the undisputed leader in AI GPUs, with an estimated 80% market share. OpenAI itself has long been one of Nvidia’s biggest customers.
Just last month, Nvidia announced a $100 billion deal with OpenAI to supply 10 gigawatts of its upcoming Vera Rubin chips. On top of that, OpenAI is co-developing custom AI chips with Broadcom.
But this new AMD deal changes the competitive equation. By choosing AMD, OpenAI diversifies its supply chain, reducing overdependence on Nvidia.
The stock market reacted instantly:
- AMD surged 23% in premarket trading.
- Nvidia slipped 2%.
- Broadcom dropped 3%.
This shows that investors see the OpenAI-AMD partnership as a serious challenge to Nvidia’s dominance.
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5. OpenAI’s Insatiable GPU Hunger
Why does OpenAI need all these chips? The answer is scale.
Training frontier AI models requires billions of parameters and immense compute power. According to industry estimates, OpenAI needs multiple gigawatts of GPU capacity annually just to maintain leadership in generative AI.
CEO Sam Altman confirmed that AMD’s chips would help build “enough AI infrastructure to meet our needs.”
At the same time, OpenAI is pursuing multiple strategies:
- Nvidia partnership for cutting-edge GPUs.
- Custom chip design with Broadcom.
- In-house AI accelerators for long-term independence.
- AMD collaboration to balance cost, supply, and political considerations.
This multi-supplier strategy ensures OpenAI won’t be bottlenecked by any single vendor in its race to dominate AI.
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Why This Deal Matters
For AMD: It’s validation of its AI roadmap and years of investment in GPU development. With OpenAI’s endorsement, AMD has the chance to become a true Nvidia rival.
For OpenAI: It guarantees a diverse chip supply at a time when compute demand is skyrocketing and GPU shortages are common.
AI industry: It signals the start of more competitive dynamics in AI chips, which could lower costs and speed up innovation.
For investors: It represents one of the most lucrative opportunities in semiconductor history, with AMD targeting $100B+ revenue upside.
The Bigger Picture: AI Chips as Geopolitical Assets
This deal also underscores a larger truth: AI chips are no longer just hardware—they are geopolitical assets.
The Stargate project reflects America’s determination to outpace China in AI infrastructure. By partnering with AMD and Nvidia, OpenAI ensures access to U.S.-made chips, keeping critical compute within American supply chains.
Meanwhile, rivals in China—such as Huawei and SMIC—are building their own AI chips under heavy U.S. sanctions. The AMD-OpenAI deal strengthens the U.S. lead in this global race.
Conclusion
The AMD-OpenAI $100B deal is more than a business contract—it’s a bet on the future of AI, where compute power equals influence. With OpenAI poised to potentially own 10% of AMD, the partnership blurs the line between customer and stakeholder.
For AMD, it’s the chance to break Nvidia’s monopoly. For OpenAI, it secures the GPU horsepower to fuel the Stargate project and its next generation of AI breakthroughs. This deal could redefine the AI chip landscape and signal a new era of competition and innovation.
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