AMD shares surge as OpenAI considers stake in chipmaker

As part of the tie-up, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, with vesting milestones tied to both deployment volume and AMD’s share price.

The first tranche vests with the first full gigawatt deployment, with additional tranches unlocking as OpenAI scales to 6 gigawatts and meets key technical and commercial milestones required for large-scale rollout.

If OpenAI exercises the full warrant, it could acquire approximately 10% ownership in AMD, based on the current number of shares outstanding.

The ChatGPT maker said the deal was worth billions, but declined to disclose a specific dollar amount.

“AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster,” Altman said in a release announcing the partnership.

The deal positions AMD as a core strategic partner to OpenAI, marking one of the largest GPU deployment agreements in the artificial intelligence industry to date.

The partnership could help ease industrywide pressure on supply chains and reduce OpenAI’s reliance on a single vendor.

OpenAI unveiled a landmark $100 billion equity-and-supply agreement with Nvidia
nearly two weeks ago, cementing the chip giant’s role in powering the next generation of OpenAI models. That arrangement combined capital investment with long-term hardware supply — though in Nvidia’s case, it was the chipmaker taking an ownership stake in OpenAI.

Shares of Nvidia fell 1% on Monday in premarket trading following news of the OpenAI-AMD deal.

That deal accounts for a dedicated 10-gigawatt portion of OpenAI’s broader 23-gigawatt infrastructure road map. At an estimated $50 billion in construction costs per gigawatt — together with the AMD deal — OpenAI has committed roughly $1 trillion in new buildout spending in just the past two weeks.

OpenAI is also in talks with Broadcom to build custom chips for its next generation of models.

The arrangement between OpenAI and AMD adds a new layer to the increasingly circular nature of AI’s corporate economy, where capital, equity and compute are traded among the same handful of companies building and powering the technology.

Nvidia is supplying the capital to buy its chips. Oracle is helping build the sites. AMD and Broadcom are stepping in as suppliers. OpenAI is anchoring the demand.

It’s a tightly wound circular economy, and one that analysts fear could face real strain if any link in the chain starts to weaken.