AMD stock skyrockets 35% as OpenAI looks to take stake in AI chipmaker

OpenAI has entered a multi-billion dollar strategic partnership with Advanced Micro Devices (AMD), agreeing to deploy 6 gigawatts of AMD's Instinct GPUs, with an initial 1-gigawatt rollout slated for the second half of 2026. The deal includes AMD issuing OpenAI warrants for up to 160 million shares, potentially giving OpenAI a 10% ownership stake tied to deployment milestones and AMD's share price. This agreement, which saw AMD's stock surge over 35% premarket and Nvidia's dip, diversifies OpenAI's critical compute infrastructure beyond its recent Nvidia deal and significantly validates AMD's competitive position in the high-performance AI chip market, highlighting the escalating, interconnected investments in the AI ecosystem.

Analysis

OpenAI and Advanced Micro Devices have reached a deal that could see Sam Altman's company take a 10% stake in the chipmaker. AMD stock skyrocketed more than 35% on Monday during premarket trading following the news. OpenAI will deploy 6 gigawatts of AMD's Instinct graphics processing units over multiple years and across multiple generations of hardware, the companies said Monday. It will kick off with an initial 1-gigawatt rollout of chips in the second half of 2026. Tune in at 9:30 a.m. ET as OpenAI President Greg Brockman and AMD CEO Lisa Su join CNBC TV to discuss the chip deal. Watch in real time on CNBC+ or the CNBC Pro stream. As part of the tie-up, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, with vesting milestones tied to both deployment volume and AMD's share price. The first tranche vests with the first full gigawatt deployment, with additional tranches unlocking as OpenAI scales to 6 gigawatts and meets key technical and commercial milestones required for large-scale rollout. If OpenAI exercises the full warrant, it could acquire approximately 10% ownership in AMD, based on the current number of shares outstanding. The ChatGPT maker said the deal was worth billions, but declined to disclose a specific dollar amount. "AMD's leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster," Altman, who is CEO of OpenAI, said in a release announcing the partnership. The deal positions AMD as a core strategic partner to OpenAI, marking one of the largest GPU deployment agreements in the artificial intelligence industry to date. The partnership could help ease industrywide pressure on supply chains and reduce OpenAI's reliance on a single vendor. OpenAI unveiled a landmark $100 billion equity-and-supply agreement with Nvidia nearly two weeks ago, cementing the chip giant's role in powering the next generation of OpenAI models. That arrangement combined capital investment with long-term hardware supply — though in Nvidia's case, it was the chipmaker taking an ownership stake in OpenAI. Shares of Nvidia fell 1% on Monday in premarket trading following news of the OpenAI-AMD deal. That deal accounts for a dedicated 10-gigawatt portion of OpenAI's broader 23-gigawatt infrastructure road map. At an estimated $50 billion in construction costs per gigawatt — together with the AMD deal — OpenAI has committed roughly $1 trillion in new buildout spending in just the past two weeks. OpenAI is also in talks with Broadcom to build custom chips for its next generation of models. The arrangement between OpenAI and AMD adds a new layer to the increasingly circular nature of AI's corporate economy, where capital, equity and compute are traded among the same handful of companies building and powering the technology. Nvidia is supplying the capital to buy its chips. Oracle is helping build the sites. AMD and Broadcom are stepping in as suppliers. OpenAI is anchoring the demand. It's a tightly wound circular economy, and one that analysts fear could face real strain if any link in the chain starts to weaken. For AMD, the partnership is both a commercial milestone and a validation of its next-generation Instinct road map. After years of trailing Nvidia in the AI accelerator market, AMD now has a flagship customer at the forefront of the generative AI boom. AMD CEO Lisa Su said it creates "a true win-win enabling the world's most ambitious AI buildout and advancing the entire AI ecosystem." It also reinforces OpenAI's broader infrastructure ambitions. Through its Stargate project, Altman's startup is rapidly transforming into one of the most aggressive infrastructure builders in the AI sector. Its first site in Abilene, Texas, is already operational and running Nvidia chips, with construction continuing to expand capacity. Upcoming builds in New Mexico, Ohio and the Midwest are expected to feature a mix of suppliers, including AMD. WATCH: OpenAI's Sarah Friar says 'full ecosystem' needs to come together to address compute crunch The strategic partnership between OpenAI and Advanced Micro Devices (AMD) marks a significant validation of AMD's position in the AI accelerator market, evidenced by the over 35% surge in its premarket stock price. The multi-year, multi-billion dollar deal involves OpenAI deploying 6 gigawatts of AMD's Instinct GPUs, with an initial 1-gigawatt rollout beginning in the second half of 2026. Crucially, the agreement grants OpenAI warrants for up to 160 million shares, potentially leading to a 10% ownership stake, which aligns long-term incentives and underscores the depth of the partnership. This move strategically diversifies OpenAI's compute supply chain away from a single vendor, following its recent landmark agreement with Nvidia, whose shares dipped 1% on the news. The deal reinforces the emerging 'circular economy' in AI, where a few key players like OpenAI, AMD, Nvidia, and Oracle are exchanging capital, equity, and compute, creating a tightly interconnected but potentially fragile ecosystem. For AMD, securing OpenAI as a flagship customer for its next-generation hardware is a major commercial and technological milestone against its primary competitor, Nvidia.

Key Decisions for Investors

• This landmark partnership significantly de-risks AMD's AI strategy and validates its Instinct GPU an a re-evaluation of the company's long-term revenue potential and its competitive standing against Nvidia.
• While Nvidia's dominant market position remains intact, investors should view this as a key indicator of increasing competition and monitor for further supply chain diversification by major AI players, which could eventually pressure Nvidia's pricing power and market share.
• Given the deployment is not scheduled until H2 2026, the significant gains in AMD stock are forward-looking; investors should track execution against deployment and technical milestones as the primary tangible evidence of the partnership's value creation.
• Investors should recognize the increasing concentration and interdependency within the AI infrastructure ecosystem, as a position in one core player like AMD or Nvidia now carries implicit exposure to the execution risks and capital expenditure plans of anchor customers like OpenAI.