AMD Skyrockets 23% as OpenAI Bets Big on Its AI Chips: A New Era in the GPU Race

AMD shares surged nearly 24% on Monday, marking one of the most dramatic single-day jumps in its history. The rally came after OpenAI announced a multibillion-dollar partnership with the chipmaker, signaling a major shake-up in the artificial intelligence hardware landscape long dominated by Nvidia.

The agreement positions AMD not just as a hardware supplier but as a strategic partner to OpenAI — and potentially a 10% stakeholder in AMD itself, depending on performance milestones. The partnership will see OpenAI deploy up to 6 gigawatts (GW) of AMD’s cutting-edge Instinct GPUs over several years, beginning with an initial 1-GW rollout in the second half of 2026.

A Billion-Dollar Deal to Power AI’s Next Leap

The collaboration underscores the increasingly urgent demand for AI compute power, which has become the biggest bottleneck in the race to build and deploy generative AI models.

“We have to do this,” said OpenAI President Greg Brockman in an interview with CNBC. “This is core to our mission — if we want to scale AI to reach all of humanity, we need to solve the compute shortage.”

According to Brockman, OpenAI has delayed launching several advanced features across ChatGPT and other products due to limited GPU availability. This deal could help change that, enabling the company to expand faster and bring new AI experiences to consumers and businesses worldwide.

Inside the AMD-OpenAI Partnership

As part of the agreement, AMD issued a warrant allowing OpenAI to purchase up to 160 million shares of AMD’s common stock. These shares will vest gradually as OpenAI achieves deployment and performance milestones:

First tranche: vests upon full 1-GW deployment.
Subsequent tranches: unlock as OpenAI scales to 6 GW and meets technical and commercial targets.

If OpenAI exercises the full warrant, it could acquire about 10% ownership in AMD, based on the company’s current share count.

While OpenAI declined to share an exact dollar figure, insiders estimate the total value of the deal to be in the tens of billions, making it one of the largest GPU supply agreements in history.

AMD’s Big Comeback: From Challenger to Contender

For a long time, AMD trailed behind Nvidia in the AI chip arena. Nvidia’s H100 and next-generation Blackwell processors have set the industry benchmark for training and running massive AI models. However, AMD’s latest Instinct MI lineup — featuring a cutting-edge chiplet design tailored for artificial intelligence workloads — is now gaining serious attention in the market.

AMD CEO Lisa Su called the partnership a validation of the company’s long-term strategy.

“AI is on a 10-year growth path,” Su told CNBC. “You need foundational compute to drive it, and partnerships like this bring the ecosystem together. We’re thrilled about what this means for the future.”

The deal not only strengthens AMD’s credibility but also diversifies OpenAI’s hardware base, reducing its heavy reliance on Nvidia.

A Circular Economy of AI Powerhouses

The AI ecosystem is becoming increasingly interconnected — and interdependent.

Just two weeks earlier, OpenAI finalized a $100-billion equity-and-supply deal with Nvidia, securing a 10-GW portion of its broader 23-GW compute roadmap. Now, with AMD joining the mix, OpenAI’s hardware strategy looks more diversified than ever.

Here’s how the AI “circular economy” is shaping up:

Company	Role in the AI Supply Chain
Nvidia	Supplies GPUs and capital investment into OpenAI
AMD	Provides Instinct GPUs and receives an equity stake from OpenAI
Broadcom	In talks to develop custom AI chips
Oracle	Builds and operates cloud sites for AI workloads
OpenAI	Anchors demand and distributes compute capacity

Each company relies on the others for survival — a tightly wound cycle of investment, compute, and innovation. Analysts warn that any weakness in one link could create ripple effects across the entire AI industry.

A Trillion-Dollar Infrastructure Vision

With the AMD and Nvidia agreements combined, OpenAI has committed to nearly $1 trillion in new infrastructure spending — a staggering figure that reflects the unprecedented scale of the AI revolution.

Each gigawatt of compute capacity is estimated to cost about $50 billion to construct and maintain. That means the 23-GW roadmap — powered by a mix of Nvidia, AMD, and potentially Broadcom chips — could reshape not only the AI industry but also the global semiconductor supply chain.

The initiative aligns with OpenAI’s broader “Stargate” project, an ambitious plan to build one of the world’s largest networks of AI data centers.

The first Stargate site, located in Abilene, Texas, is already operational and running on Nvidia GPUs. Additional campuses are under development in New Mexico, Ohio, and the U.S. Midwest, where AMD hardware is expected to play a central role.

Industry Implications: The Start of the GPU Duopoly

Until now, Nvidia has controlled over 80% of the AI GPU market, making it the undisputed king of AI compute. But OpenAI’s endorsement of AMD could reshape that balance of power.

The partnership brings two key implications:

Supply Diversification:
With multiple vendors onboard, OpenAI can scale faster without being constrained by one supplier’s backlog.
Competitive Pricing:
Nvidia’s GPUs are extremely powerful but also expensive. AMD’s entry could introduce price competition, lowering costs for future AI deployments.

For investors, this marks the potential beginning of a duopoly in the AI accelerator space — with AMD finally stepping out of Nvidia’s shadow.

Market Reaction: AMD Soars, Nvidia Slips

The stock market responded instantly. AMD shares jumped 23.71%, closing at their highest level in over two years. Meanwhile, Nvidia’s stock dipped about 1%, as traders recalibrated expectations for future AI dominance.

Wall Street analysts were quick to issue bullish notes:

Goldman Sachs raised its AMD price target by 25%, citing “transformational upside from the OpenAI deal.”
Morgan Stanley projected AMD could capture 15–20% of the global AI GPU market share by 2027.
Wedbush Securities called the partnership “a watershed moment for AMD’s data-center ambitions.”

Investors also viewed the deal as a vote of confidence in AMD’s ability to compete technically, not just commercially.

The Compute Crunch: AI’s Growing Pain Point

Despite the massive scale of these deals, AI companies are still grappling with a global compute shortage.

OpenAI’s CFO Sarah Friar highlighted the issue in a CNBC interview, emphasizing that the “entire ecosystem” — from chip designers to data-center operators — must collaborate to solve the crunch.

“We can’t do this alone,” she said. “The full ecosystem needs to come together to ensure we have enough compute capacity to meet global demand.”

The problem is twofold:

Supply bottlenecks in advanced semiconductor manufacturing (particularly in HBM3 memory and packaging).
Power constraints, as new AI data centers consume unprecedented levels of electricity.

By partnering with multiple suppliers, OpenAI aims to spread risk and ensure a steady flow of compute capacity as it scales globally.

A Win-Win for Both Sides

For AMD, this partnership delivers instant validation, global attention, and potentially billions in new revenue. It also reinforces the company’s position as a credible alternative to Nvidia for large-scale AI deployments.

For OpenAI, it unlocks the compute horsepower needed to expand faster, build smarter models, and accelerate its commercial rollout of tools like ChatGPT Enterprise, Sora, and upcoming multimodal systems.

Lisa Su summed it up best:

“This is a true win-win — enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”

The Bigger Picture: A New Industrial Revolution

The AMD-OpenAI alliance isn’t just another corporate partnership. It’s part of a larger transformation in how the world builds, funds, and powers intelligence.

In the span of just two weeks:

OpenAI secured $1 trillion in total infrastructure spending.
Two of the world’s top chipmakers — Nvidia and AMD — became both investors and suppliers.
The company signaled that AI compute, not data or algorithms, will be the real bottleneck in the years ahead.

As this ecosystem matures, expect the boundaries between chipmakers, AI labs, and cloud providers to blur further. The next decade may not just be about smarter AI — but about who controls the compute behind it.

Author’s Note

The OpenAI-AMD partnership marks a historic turning point for the semiconductor and AI industries alike. As AMD steps into the spotlight and OpenAI doubles down on diversification, the race for compute supremacy is entering a new phase — one where collaboration, capital, and innovation intersect like never before.

For investors, technologists, and policymakers, this moment signals the start of a multi-trillion-dollar AI infrastructure boom that will redefine global technology leadership over the next decade.

The Financial And Tech Literacy