OpenAI signs multibillion-dollar AMD chip deal worth up to ~$300B with 10% equity warrants
Oct 6, 2025
Key Points
- OpenAI commits to a five-year, multibillion-dollar partnership with AMD to deploy six gigawatts of MI450 chips for inference, challenging NVIDIA's AI chip dominance.
- AMD stock surged 33% after OpenAI secured warrants for up to 160 million AMD shares at 1¢ each, contingent on deployment milestones that could generate tens of billions in revenue by 2027.
- OpenAI splits its semiconductor strategy across vendors: NVIDIA for training, AMD for inference, and Broadcom for custom chips, locking in long-term commitments that spread dependency.
Summary
OpenAI and AMD announced a multibillion-dollar five-year partnership to deploy six gigawatts of AMD's MI450 chips for inference workloads. OpenAI commits to purchasing the chips directly or through cloud partners like Oracle, starting with one gigawatt in the second half of 2025. This move directly challenges NVIDIA's dominance in AI semiconductors.
OpenAI receives warrants for up to 160 million AMD shares—roughly 10% of the company—at 1¢ per share. The warrants are awarded in phases and tied to deployment milestones and AMD stock price increases. AMD chief Lisa Su said the partnership will generate tens of billions in new revenue for AMD by 2027. AMD stock opened 33% higher on Monday.
The total dollar value of the six-gigawatt commitment remains undisclosed. AMD has said infrastructure costs tens of billions per gigawatt, suggesting the deal could approach $100 billion, but neither company has formally stated a comprehensive expected cost.
OpenAI is splitting its chip strategy between training and inference. The company continues to rely on NVIDIA for model training but is moving inference workloads to AMD's cheaper alternatives. This approach lets OpenAI keep training on stable, mature models like GPT-4 while optimizing inference across different chip architectures.
The announcement reflects OpenAI's broader capital and chip strategy. In late September, NVIDIA said it would invest $100 billion in OpenAI over the next decade, creating a circular arrangement where OpenAI uses NVIDIA's capital to buy NVIDIA chips. OpenAI separately signed a $10 billion deal with Broadcom to build its own in-house chips. Combined with the AMD partnership, these moves show a multi-vendor approach that spreads dependency and locks in long-term commitments across the semiconductor supply chain.
The warrants structure ties OpenAI's financial incentives directly to AMD's success. This alignment pressures both companies to hit deployment targets and positions OpenAI as a major shareholder with direct stake in AMD's execution.