AI Power Play: AMD Teams Up with OpenAI in Groundbreaking Chip Deal

AMD announced a significant multi-year partnership with OpenAI on Monday, to supply artificial intelligence chips. This venture is set to bring in tens of billions in annual revenue and provides OpenAI with the option to purchase up to 10% of AMD, highlighting the chipmaker's strong position in AI technology.

The news sent AMD shares soaring by over 23% in premarket trading. Forrest Norrod, AMD's executive vice president, emphasized that the deal is transformative for both AMD and the broader industry. This agreement will deploy hundreds of thousands of AMD's AI chips over the next several years, starting in the latter half of 2026, signifying a robust growth trajectory for AMD.

OpenAI CEO Sam Altman noted that the deal would bolster OpenAI's AI infrastructure ambitions. The agreement with AMD won't alter OpenAI's existing plans, maintaining its partnerships with major tech players, including Microsoft, while leveraging AMD's prowess in AI innovation.

(With inputs from agencies.)