TLDR
- AMD stock surged over 35% in premarket trading after announcing a multi-year chip supply deal with OpenAI
- OpenAI will purchase up to 6 gigawatts of AMD GPUs starting with MI450 chips in the second half of 2026
- The deal includes a warrant giving OpenAI the option to buy up to 160 million AMD shares (roughly 10% of the company) at 1 cent per share
- AMD expects to generate tens of billions of dollars in annual revenue from the deal, with over $100 billion in total new revenue over four years
- The agreement represents a major vote of confidence in AMD’s AI chips as competition with Nvidia heats up
AMD shares rocketed in premarket trading Monday morning following news of a massive chip supply agreement with OpenAI. The deal puts AMD stock on track to open at its highest level since March 2024.

The multi-year partnership will see AMD supply hundreds of thousands of AI chips to the ChatGPT creator. The total deployment equals six gigawatts of computing power over several years.
OpenAI plans to build a one-gigawatt facility using AMD’s upcoming MI450 series chips. Construction will begin in 2026, with AMD recognizing revenue starting in the second half of that year.
The financial terms are staggering for AMD. The company expects tens of billions of dollars in annual revenue from the deal.
CFO Jean Hu described the partnership as highly accretive to AMD’s non-GAAP earnings-per-share. The company projects more than $100 billion in new revenue over four years when including business from other customers attracted by the OpenAI deal.
“This is really the pioneer, a pioneer in the industry that has a lot of influence over the broader ecosystem,” said AMD strategy chief Mat Hein. Other customers are expected to follow OpenAI’s lead in choosing AMD chips.
The deal includes an unusual equity component. AMD issued a warrant allowing OpenAI to purchase up to 160 million shares at just 1 cent each.
That represents roughly 10% of AMD’s outstanding shares. The warrant vests in tranches tied to specific milestones agreed upon by both companies.
Milestone-Based Equity Structure
The first tranche vests after the initial MI450 chip shipment in late 2026. Subsequent tranches unlock at specific AMD stock price targets.
The final installment requires AMD shares to reach $600. That would represent more than triple the Friday closing price of $164.67.
AMD executive vice president Forrest Norrod called the deal “transformative, not just for AMD, but for the dynamics of the industry.” The agreement offers OpenAI a chance to take an ownership stake in one of Nvidia’s biggest competitors.
OpenAI and AMD have collaborated for years. The AI company provided design input on earlier chip generations like the MI300X.
OpenAI’s Computing Appetite
The massive purchase reflects OpenAI’s need for computing power as it develops more advanced AI systems. CEO Sam Altman said the AMD deal will help OpenAI build enough infrastructure to meet its needs.
OpenAI has generated around $4.3 billion in revenue in the first half of 2025. The company has burned through $2.5 billion in cash during that period as it invests in talent and new AI tools.
The startup, valued at $500 billion, has been securing chip supply from multiple sources. In September, Nvidia announced an investment of up to $100 billion in OpenAI that includes supplying at least 10 gigawatts of Nvidia systems.
OpenAI plans to deploy a gigawatt of Nvidia’s next-generation Vera Rubin chips in late 2026. Altman has discussed reaching 250 gigawatts of total computing capacity by 2033.
The company is also developing its own silicon for AI use in partnership with Broadcom. Last month, OpenAI signed a $300 billion agreement to purchase cloud equipment from Oracle.
AMD stock has underperformed Nvidia over the past year, rising just 1% compared to Nvidia’s 52% gain. The gap has narrowed in recent months, with AMD climbing 75% over the last six months versus Nvidia’s 84%.
Nvidia shares dipped more than 1% in premarket trading Monday, while Broadcom fell 1.5%. AMD has 1.62 billion shares outstanding and a market value of $267.23 billion.
Analysts estimate AMD will generate revenue of $32.78 billion this year. The OpenAI deal would dramatically expand that figure in coming years.