OpenAI and AMD have announced a major multi-year partnership that combines a massive chip supply agreement with a potential ownership stake. Under the deal, AMD will provide the ChatGPT maker with large numbers of its latest Instinct MI450 processors, which will be used to power the next generation of OpenAI’s artificial intelligence models and services. AMD has also given the Sam Altman-led company the option to buy up to 160 million of its shares at a nominal price, which could give OpenAI about 10% ownership in the company if the option is fully exercised.
Under the terms of the arrangement, OpenAI will deploy hundreds of thousands of AMD’s new Instinct MI450 processors over several years. The size of this rollout is huge, as the AI trendsetter plans to build computer systems that, together, will require around 6 gigawatts of power. The first stage of this plan will begin with around 1 gigawatt and is expected to start running in the second half of 2026.
The agreement carries a financial component rarely seen in chip-supply partnerships. AMD has issued OpenAI a warrant giving it the right to purchase as many as 160 million AMD shares for a nominal price of one cent per share. If fully exercised, the option would translate into around a 10% ownership stake in the semiconductor company. The warrant will not be available to OpenAI all at once but will unlock in stages. These stages depend on how successfully OpenAI rolls out AMD’s chips and also on how AMD’s stock performs.
For AMD, the contract could bring potential revenue in the tens of billions of dollars, which would be a massive boost as the company is constantly trying to challenge Nvidia’s dominance in the AI chip market. After the latest announcement, AMD shares had already jumped more than 20% in early trading, reaching their highest value since early 2024. Meanwhile, with this deal, the ChatGPT maker aims to diversify its hardware supply chain.
However, the timing of this latest deal is noteworthy, as it comes just a week after AMD’s prominent rival Nvidia announced plans to invest up to $100 billion in OpenAI. Under that agreement, Nvidia will provide at least 10 gigawatts of its high-performance AI hardware to support OpenAI’s expanding computational needs. Even the AI giant recently also signed a major five-year, $300 billion cloud computing deal with Oracle. But despite all these efforts and its newly reached $500 billion valuation, the AI company still faces significant financial and legal challenges. For example, its $200-per-month ChatGPT Pro plan is reportedly losing money despite its popularity, and OpenAI is involved in several lawsuits, including a recent one from Elon Musk’s xAI over alleged trade secret theft and another filed in August 2025 by the parents of a teenager who took his own life, claiming ChatGPT was partly responsible.
At the same time, AMD is also facing significant challenges, including financial pressures. Recently, the company agreed to pay 15% of its revenue from chip sales to China to the US government in exchange for export licenses.
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