• OpenAI signs a multi-year deal with AMD for AI chip supply.
• The deal is expected to generate tens of billions in revenue for AMD.
• AMD shares surged over 30% following the announcement, adding approximately $80 billion in market value.

OpenAI has announced a significant multi-year partnership with AMD to supply artificial intelligence chips, with expectations of generating tens of billions of dollars in annual revenue for AMD. The deal provides OpenAI an option to buy up to 10% of AMD, which has led to a remarkable surge in AMD's stock by over 30% on the announcement day, adding roughly $80 billion to its market capitalization. OpenAI CEO Sam Altman stated, "Excited to partner with AMD to use their chips to serve our users," emphasizing the growing demand for computing power in the AI sector, according to Indiatimes and LATimes.

Under the agreement, OpenAI will deploy hundreds of thousands of AMD's AI chips, which will require up to six gigawatts of power, with deliveries starting in the second half of 2026. Analysts project that this arrangement will validate AMD's technology amid stiff competition from Nvidia, who has been dominating the AI chip market, as reflected in their substantial sales and continued high demand for their products. The deal is seen as a transformative step not just for OpenAI but for AMD's role in the rapidly evolving AI landscape, according to Al Jazeera and South China Morning Post.

This deal follows OpenAI's broader strategy to diversify its chip supply, which includes agreements with Nvidia and other chipmakers like Oracle and Broadcom. OpenAI has committed roughly $1 trillion across various partnerships to secure computing power essential for its projects, with AMD's role being crucial in this competitive arena requiring immense computational resources for AI developments. According to Business Insider and Indiatimes, the cumulative power demand for these endeavors emphasizes the urgent need for advanced AI processing capabilities.