AMD CEO: OpenAI deal involves AMD stake and is linked to AMD stock milestones; final shares vested at $600 per share

AMD CEO: OpenAI deal involves AMD stake and is linked to AMD stock milestones; final shares vested at $600 per share

Advanced Micro Devices (AMD) shares surged over 25% on Monday following the announcement of a multi-year partnership with OpenAI. The deal, one of the largest in the AI hardware space, positions AMD as a key supplier for OpenAI's expanding infrastructure needs.

Under the agreement, OpenAI will deploy up to 6 gigawatts of AMD's Instinct GPUs over several years, starting with a 1 GW rollout in 2026. The deal also includes a warrant for up to 160 million shares, with vesting linked to chip deployment milestones and share price performance. If fully exercised, the stake would amount to about 10% of AMD's outstanding shares .

OpenAI CEO Sam Altman highlighted that AMD's high-performance chips will help "accelerate the pace of AI innovation," while AMD chief Lisa Su called the deal a "win-win" for both companies and the wider AI ecosystem .

The partnership comes just weeks after OpenAI's $100 billion hardware deal with Nvidia, underscoring the AI firm's push to diversify chip suppliers amid surging global demand. Analysts say the tie-up could significantly boost AMD's position in the AI accelerator market, long dominated by Nvidia. AMD's shares closed at $205.50, marking one of their strongest trading days in recent years .

The deal grants OpenAI a warrant to purchase up to 160 million AMD shares at 1 cent each, vesting in tranches tied to milestones such as MI450 shipments and stock price targets up to $600. The initial vesting occurs after the first MI450 shipments in the second half of 2026, with subsequent portions linked to escalating AMD stock price targets culminating at $600 per share .

Executives at AMD project this partnership alone will generate tens of billions of dollars in annual revenue, while the broader ripple effects could unlock more than $100 billion in new revenue over four years from OpenAI and additional customers . The arrangement extends beyond hardware supply, granting OpenAI the option to acquire up to roughly 10% of AMD through a warrant for 160 million shares at 1 cent each, vesting in tranches tied to milestones.

This collaboration builds on years of joint development, where OpenAI contributed to the design of AMD’s earlier MI300X chips, highlighting a deepening technical alignment. For OpenAI, the deal addresses surging compute demands critical to sustaining innovations like ChatGPT, as articulated by CEO Sam Altman .

Market reactions were swift, with AMD shares surging more than 25% to $206.16 in premarket trading, on pace for their highest open since March 2024. In contrast, NVDA dipped 2%, and AVGO fell 3%, signaling investor recalibration amid intensifying rivalry .

OpenAI's broader maneuvers, including a recent non-binding agreement with Microsoft to transition into a for-profit entity, reflect evolving governance to fuel accelerated growth. Yet, sources confirm the AMD deal integrates seamlessly with these plans, preserving commitments to Microsoft and ongoing compute initiatives .

The partnership exemplifies how strategic alliances are fortifying the AI infrastructure backbone, ensuring robust capacity for the next wave of generative technologies while fostering innovation through shared equity incentives.