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AMD Stock Soars After Inking a Huge AI Chip Deal With OpenAI

Oct 06, 2025 07:35:00 -0400 by Tae Kim | #Chips

OpenAI received a warrant to purchase up to 160 million shares of AMD stock. (Photograph by Chris Stowers/Bloomberg)

Key Points

Advanced Micro Devices shares surged on Monday, trading near record levels for the first time in more than a year. The chip maker announced a long-term deal to become a key supplier to OpenAI’s artificial-intelligence infrastructure buildout.

OpenAI plans to deploy 6 gigawatts worth of AMD Instinct graphics processing units, or GPUs, over the course of the partnership. The first 1 gigawatt deployment will begin in the second half of 2026, the companies said. For context, one nuclear reactor can typically generate one gigawatt of electricity.

As part of the agreement, OpenAI received a warrant to purchase up to 160 million shares of AMD stock at 1 cent apiece, representing roughly 10% of AMD’s total shares outstanding. The warrants are structured to vest as specific milestones are met. The warrants expire Oct. 5, 2030.

The size of the AMD deal with OpenAI suggests the chip maker will be the second-largest supplier of AI chips for the AI start-up.

“We are thrilled to partner with OpenAI to deliver AI compute at massive scale,” AMD CEO Lisa Su said. “This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”

Created with Highcharts 9.0.1Advanced Micro DevicesSource: FactSetAs of Oct. 6

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AMD stock rose by 24% to $203.71 Monday. Shortly after the open, shares came close to besting AMD’s intraday record of $227.30, set on March 8, 2024. Nvidia stock was down 1.1%, while Broadcom fell 0.9%.

On a conference call with analysts, AMD’s Su said the deal is a “clear validation” of the company’s technology road map. The executive said there is nothing exclusive about the agreement, and AMD will be able to serve other customers. She said the Instinct GPUs will be used by OpenAI for both training and inference. Inference is the process of generating answers from AI models.

AMD management said they expect the OpenAI partnership will enable the company to eventually generate tens of billions of dollars in annual revenue and over $100 billion in total revenue from selling chips over the next several years.

The latest deal comes after Broadcom announced last month it had won a $10 billion order for AI chips from a new customer, which The Wall Street Journal reported was OpenAI.

Weeks later, OpenAI and Nvidia announced a letter of intent for a new partnership where Nvidia plans to invest as much as $100 billion in OpenAI to support the buildout of 10 gigawatts of AI data center capacity.

Write to Tae Kim at tae.kim@barrons.com and Nate Wolf at nate.wolf@barrons.com