AMD Secures Long-Term Deal with OpenAI, Stock Soars 23% on After-Hours Trading
AMD has inked a long-term deal with OpenAI, securing a multi-generational supply of its Instinct AI chips. The agreement, announced in October 2025, has sent AMD's stock soaring by over 23% in after-hours trading. This marks a significant shift for OpenAI, which previously relied on Nvidia and Broadcom, and maintains close ties with Microsoft.
The partnership covers a wide range of AMD's AI offerings, including Instinct AI GPUs and 'rack-scale AI solutions'. OpenAI will use AMD at scale for the first time, potentially challenging Nvidia's dominant position in the AI chip market. The agreement spans multiple generations of Instinct AI chips, with the first 1-gigawatt cluster based on the new MI450 series slated for the second half of 2026.
As part of the deal, OpenAI has received a warrant allowing it to acquire up to 160 million AMD shares at a price of 1 cent per share, representing around 10% of the company. This option will vest based on specific technical milestones and stock price targets, with a ceiling of $600 per share.
The agreement between AMD and OpenAI is set to provide a significant boost to AMD's presence in the AI chip market. With OpenAI committing to use AMD at scale and potentially acquiring a substantial stake in the company, AMD's future in AI looks promising. The first fruits of this partnership are expected to come to life in late 2026, with the launch of the 1-gigawatt cluster based on the new Instinct MI450 series.
