AMD Strikes Back: Lands Oracle AI Chip Deal to Challenge Nvidia Dominance

Advanced Micro Devices Inc. (AMD) has secured a significant AI chip order from Oracle Corp., marking a notable stride in its efforts to rival Nvidia in the burgeoning AI semiconductor market. The news propelled AMD’s shares to spike nearly 4% during Tuesday’s trading session.

According to the announcement made on Tuesday, Oracle Cloud Infrastructure (OCI) plans to deploy 50,000 units of AMD's upcoming MI450 AI chips in its data centers starting from the third quarter of 2026. AMD's MI450, the most advanced GPU the company has developed, will be integrated with its Helios server rack system, leveraging AMD's proprietary central processing units (CPUs), to directly contend with Nvidia’s next-gen “Vera Rubin” AI chips.

This partnership underscores AMD’s growing recognition in the tech industry. Neither AMD nor Oracle has disclosed the specific completion date for the full deployment or the portion of AMD's output the order represents. Still, the move provides a significant endorsement of AMD's technological capabilities.

Large tech companies are racing to build infrastructure to support the skyrocketing demand for AI computation. AMD is striving to become a formidable competitor against Nvidia, the current leader in AI chips, by offering a suite of GPU-based AI accelerators, general processors, and some networking chips. The company is bolstering its capabilities to offer comprehensive computing systems to data center operators, similar to its more dominant rival. According to IDC research, AMD shipped approximately 100,000 AI chips in the second quarter, whereas Nvidia's shipments reached 1.5 million units during the same period.

Karan Batta, OCI’s senior vice president, expressed optimism about the adoption of AMD's chips, particularly in AI inference. Furthermore, Mahesh Thiagarajan, executive vice president at OCI, mentioned the ongoing collaboration with AMD aims to deliver an open, secure, and scalable cloud infrastructure to meet modern AI needs.

Industry experts suggest this collaboration introduces AMD’s MI450 to large-scale public cloud scenarios for the first time, potentially allowing more customers to rent AI computing resources. This initiative is poised to help AMD narrow the competitive gap with Nvidia in the data center sector.

The competitive landscape is also witnessing movements from other players, like Intel Corp., which is attempting a comeback in the AI chip arena. Intel is developing a new AI accelerator named “Crescent Island,” designed to compete directly against Nvidia and AMD. Optimized for the inference stage in AI processes, this chip features high energy efficiency and large memory capacity, with samples expected to be available by the latter half of 2026.