- AMD to supply OpenAI hundreds of thousands of AI chips
- Deal includes warrant for OpenAI to buy up to 10% AMD stake at 1 cent/shr
- AMD expects more than $100 billion revenue from OpenAI, others as a result of deal
- AMD shares on track to record highest percentage gain since April 2016
SAN FRANCISCO, (Reuters) – AMD (AMD.O),will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.
Shares of the chipmaker surged more than 34% on Monday, putting them on track for their biggest one-day gain in over nine years and adding roughly $80 billion to the company’s market value.
The deal, latest in a string of investment commitments, underscores OpenAI and the broader AI industry’s voracious appetite for computing power as companies race toward developing AI technology that meets or exceeds human intelligence.
“We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry,” AMD executive vice president Forrest Norrod told Reuters on Sunday.
The agreement closely ties the startup at the center of the AI boom to AMD, one of the strongest rivals of Nvidia (NVDA.O), which recently agreed to make substantial investments in OpenAI.
Analysts said it was a major vote of confidence in AMD’s AI chips and software but is unlikely to dent Nvidia’s dominance, as the market leader continues to sell every AI chip it can make.
