AMD Secures Landmark AI Chip Deal with OpenAI, Stock Soars 27%
Advanced Micro Devices (AMD) shares surged 27% Monday after announcing a multi-year agreement to supply artificial intelligence chips to ChatGPT Maker OpenAI. The deal includes a warrant allowing OpenAI to purchase up to 160 million AMD shares—approximately 10% of the company—as AMD deploys 6GW of computing power using its Instinct MI450 accelerators.
Barclays analyst Thomas O'Malley calls the structured warrant agreement 'mutually beneficial,' with vesting tied to both chip deployment milestones and AMD's stock performance. The final tranche activates at $600 per share, suggesting significant upside potential from current levels. AMD projects 'tens of billions' in revenue per GW at healthy margins, with initial deployments expected in late 2026.
