AMD Stock Drops as OpenAI Chooses Broadcom for $10B Custom Chip Deal

Advanced Micro Devices shares fell sharply Friday after reports surfaced that OpenAI signed a $10 billion custom chip agreement with Broadcom. The deal represents a significant setback for AMD's AI ambitions, as the company continues to trail Nvidia in the competitive AI accelerator market.

While AMD maintains strength in consumer GPUs and CPUs, its inability to secure major AI design wins raises questions about its positioning in the high-growth AI hardware sector. The Broadcom-OpenAI partnership introduces another formidable competitor to the space.

Friday's 5.4% decline contrasts with AMD's broader 26.6% year-to-date gain, reflecting investor concerns about the company's AI roadmap. Market participants appear to be reevaluating growth prospects as the competitive landscape intensifies.