AMD shares jump 16% on chip deal with OpenAI

AMD shares jump 16% on chip deal with OpenAI

Advanced Micro Devices (AMD) shares surged by 16% on Monday, September 12, 2025, following the announcement of a multibillion-dollar partnership with OpenAI. The deal involves OpenAI committing to purchase 6 gigawatts worth of AMD’s chips, starting with the MI450 chip next year. The collaboration is aimed at developing AI data centers that will run on AMD processors, marking a significant challenge to industry leader Nvidia .

Under the terms of the agreement, OpenAI will buy the chips either directly or through its cloud computing partners. AMD’s Chief Executive, Lisa Su, indicated that the deal will result in tens of billions of dollars in new revenue for the chip company over the next half-decade. The expected cost of the project is in the tens of billions of dollars per gigawatt of computing capacity .

OpenAI plans to use the AMD chips for inference functions, which are the computations that enable AI applications such as chatbots to respond to user queries. The increasing demand for inference computing has been driven by the proliferation of large language models and other AI tools .

The partnership between AMD and OpenAI is part of a broader trend of increased competition in the AI semiconductor market. Nvidia remains the preferred chip supplier among AI companies, but it is facing growing competition from other firms such as AMD and cloud giants like Google and Amazon, which design and sell their own AI chips. OpenAI has also recently signed a $10 billion deal with Broadcom to build its own in-house chip .

The deal highlights the growing importance of AI infrastructure and the potential for significant revenue growth for companies involved in the supply chain. However, the partnership also underscores the increasing complexity and cost of developing and deploying AI systems. OpenAI and AMD have described the agreement as "definitive" and plan to immediately file details with securities regulators .

The stock market's response to the deal reflects investor optimism about the potential for growth in the AI sector. The partnership between AMD and OpenAI is just one example of the broader trend of increased investment in AI infrastructure. Other companies, such as OpenAI and Meta, are also investing heavily in chips, data centers, and electrical power, contributing to fears that a bubble may be building in the AI infrastructure market .

Overall, the partnership between AMD and OpenAI represents a significant milestone in the AI semiconductor market. The deal highlights the growing importance of AI infrastructure and the potential for significant revenue growth for companies involved in the supply chain. However, it also underscores the increasing complexity and cost of developing and deploying AI systems.