Shares of chipmaker AMD (AMD) soared in pre-market trading on Monday after the company announced a multi-billion deal with OpenAI (OPAI.PVT). The move will see AMD provide upwards of 6 gigawatts of GPUs to the AI juggernaut over several generations starting with its MI450 chips in the second half of 2026.
As part of the deal, OpenAI will take a stake in AMD worth up to 160 million shares, or roughly 10% of the company. Shares will vest in traunches as AMD hits specific milestones. The traunch will vest when AMD deploys its initial 1 gigawatt of chips.
“Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” AMD CFO Jean Hu said in a statement.
“This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD’s non-GAAP earnings-per-share.”
The deal comes just a few weeks after AMD’s chief rival Nvidia (NVDA) announced it is investing $100 billion in OpenAI to help the startup continue to build out its own data centers that power its AI offerings.
OpenAI is currently valued at $500 billion, making it the world’s most valuable startup.
Just last month, OpenAI signed a $300 billion agreement to purchase cloud equipment from Oracle (ORCL), according to The Wall Street Journal.
AMD’s stock has generally underperformed Nvidia’s over the last year, rising just 1% in the past 12 months. Nvidia’s stock price rose 52% during the same period.
Things have picked up over the last 6 months, however, with AMD shares climbing 75%. Nvidia’s shares jumped 84%.
The massive influx of spending on AI projects and Wall Street’s enormous investments have raised concerns of an AI bubble. During Italian Tech Week last week, Amazon founder Jeff Bezos said we’re likely seeing such a bubble, but that AI will still provide benefits to industries and consumers across the globe.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
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Shares of chipmaker AMD (AMD) soared in pre-market trading on Monday after the company announced a multi-billion deal with OpenAI (OPAI.PVT). The move will see AMD provide upwards of 6 gigawatts of GPUs to the AI juggernaut over several generations starting with its MI450 chips in the second half of 2026.
As part of the deal, OpenAI will take a stake in AMD worth up to 160 million shares, or roughly 10% of the company. Shares will vest in traunches as AMD hits specific milestones. The traunch will vest when AMD deploys its initial 1 gigawatt of chips.
“Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” AMD CFO Jean Hu said in a statement.
“This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD’s non-GAAP earnings-per-share.”
The deal comes just a few weeks after AMD’s chief rival Nvidia (NVDA) announced it is investing $100 billion in OpenAI to help the startup continue to build out its own data centers that power its AI offerings.
OpenAI is currently valued at $500 billion, making it the world’s most valuable startup.
Just last month, OpenAI signed a $300 billion agreement to purchase cloud equipment from Oracle (ORCL), according to The Wall Street Journal.
AMD’s stock has generally underperformed Nvidia’s over the last year, rising just 1% in the past 12 months. Nvidia’s stock price rose 52% during the same period.
Things have picked up over the last 6 months, however, with AMD shares climbing 75%. Nvidia’s shares jumped 84%.
The massive influx of spending on AI projects and Wall Street’s enormous investments have raised concerns of an AI bubble. During Italian Tech Week last week, Amazon founder Jeff Bezos said we’re likely seeing such a bubble, but that AI will still provide benefits to industries and consumers across the globe.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
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