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OpenAI Inks AMD Chips Deal Worth Tens of Billions of Dollars

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Advanced Micro Devices Inc. shares surged in premarket trading after the chipmaker signed a deal with OpenAI for AI infrastructure that could generate tens of billions of dollars in new revenue.

The two signed a definitive agreement for OpenAI to deploy 6 gigawatts of AMD graphics processing units over multiple years, the companies said Monday in a statement. AMD has given OpenAI a warrant for as many as 160 million shares which will vest as milestones are achieved. Those targets require AMD’s stock price to continue to increase in value and future exercise points include a tranche tied to a share price of $600. AMD shares closed Friday at $164.67.


  • OpenAI sent shares of e-commerce companies Shopify Inc. and Etsy Inc. soaring after unveiling an instant buy option in ChatGPT. OpenAI's announcements and events are critical for traders, with investors looking for clues about the company's plans at its third annual DevDay. OpenAI's influence in the stock market is likely to grow alongside its expansion, with the company's announcements and events driving stock moves for partners, infrastructure providers, and companies in businesses OpenAI is pushing into.
 
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Can TSM provide all the additional chips AMD will need or would AMD need another supplier? Can that be the source of the AMD using IFS rumors?
 
I find this a little funny since just two weeks ago Nvidia announced a similar partnership with OpenAI:

nvidianews.nvidia.com

OpenAI and NVIDIA Announce Strategic Partnership to Deploy 10 Gigawatts of NVIDIA Systems

OpenAI and NVIDIA today announced a letter of intent for a landmark strategic partnership to deploy at least 10 gigawatts of NVIDIA systems for OpenAI’s next-generation AI infrastructure to train and run its next generation of models on the path to deploying superintelligence.
nvidianews.nvidia.com nvidianews.nvidia.com
 
Erik F said:
Can TSM provide all the additional chips AMD will need or would AMD need another supplier? Can that be the source of the AMD using IFS rumors?
Click to expand...

TSMC will be able to meet the demand as long as it can build fabs at the speed it wants and at the locations it wants.
 
Xebec said:
I find this a little funny since just two weeks ago Nvidia announced a similar partnership with OpenAI:

nvidianews.nvidia.com

OpenAI and NVIDIA Announce Strategic Partnership to Deploy 10 Gigawatts of NVIDIA Systems

OpenAI and NVIDIA today announced a letter of intent for a landmark strategic partnership to deploy at least 10 gigawatts of NVIDIA systems for OpenAI’s next-generation AI infrastructure to train and run its next generation of models on the path to deploying superintelligence.
nvidianews.nvidia.com nvidianews.nvidia.com
Click to expand...

Don’t you think AI has brought everything and everyone together like one big happy family?
 
hist78 said:
TSMC will be able to meet the demand as long as it can build fabs at the speed it wants and at the locations it wants.
Click to expand...

It takes roughly the same time for TSMC to build a fab in Taiwan as it does to build a data center in the US so there is plenty of time to make those wafers. AI Training might be a bubble but AI inferencing is not. If you are not using generative AI for personal and professional tasks you are behind the learning curve and at some point in time it will jam you up. This also pushes AI to the edge which will ensure the semiconductor industry hits $1T by 2030, absolutely.
 
Daniel Nenni said:
For those doing the mathematics, $600 per share at 160m shares would be $96 billion dollars, or roughly the same value as the hardware in the deal.

morethanmoore.substack.com

AMD and OpenAI: The 6 Gigawatt Bet

Redefining AI Competitive Economics
morethanmoore.substack.com morethanmoore.substack.com
Click to expand...
Really does feel like one giant financial scheme to keep this whole thing afloat…
AMD’s announcement of a strategic partnership with OpenAI represents not just another GPU supply agreement, but a structural reconfiguration of how AI infrastructure is financed and aligned.
Click to expand...
 
hist78 said:
TSMC will be able to meet the demand as long as it can build fabs at the speed it wants and at the locations it wants.
Click to expand...
But will they for a price AMD would pay? If intel has a lot of idle capacity, wouldn't they offer it at a better price than TSM need-a-new-fab prices?
 
semiwiki.com

Dr. Lisa Su Wiki - Semiwiki

Full Name: Lisa Tzwu-Fang SuDate of Birth: November 7, 1969Place of Birth: Tainan, TaiwanCitizenship: United StatesOccupation: Chair and Chief Executive Officer, Advanced Micro Devices (AMD)Education: B.S., M.S., and Ph.D. in Electrical Engineering, Massachusetts Institute of Technology (MIT)...
semiwiki.com semiwiki.com
 
This is basically an incentive scheme for AMD to get into the AI Datacenter space.

"Get me into the AI Datacenters and you will get 10% equity as a reward."

Warrants expire in 2030, so this better happen in the next 5 years.

I can't wrap my head around why OpenAI would want to have both NVidia and AMD GPUs in its datacenters, and then have to support both CUDA and ROCm stack.
 
sonchoy said:
I can't wrap my head around why OpenAI would want to have both NVidia and AMD GPUs in its datacenters, and then have to support both CUDA and ROCm stack.
Click to expand...

Self preservation. A duopoly is better than a monopoly. Sam Altman is a future thinker versus a day-to-day business manager. Future thinkers had better start thinking about the foundry business as well.
 
sonchoy said:
This is basically an incentive scheme for AMD to get into the AI Datacenter space.

"Get me into the AI Datacenters and you will get 10% equity as a reward."

Warrants expire in 2030, so this better happen in the next 5 years.

I can't wrap my head around why OpenAI would want to have both NVidia and AMD GPUs in its datacenters, and then have to support both CUDA and ROCm stack.
Click to expand...
Just watch the Bloomberg interview with Lisa Su and CTO OpenAI Greg Brockman:

https://www.bloomberg.com/news/vide...gns-amd-chips-deal-to-support-build-out-video

Interesting and very diplomatic anwser how Su ducked the question if she was going to use INTEL for making (some of) her AI chips; basically she said, I see no reason (presently) as I'm having this tight collaboration with TSMC that I have invested so much in over the last many years.......
 
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Daniel Nenni said:
Self preservation. A duopoly is better than a monopoly. Sam Altman is a future thinker versus a day-to-day business manager. Future thinkers had better start thinking about the foundry business as well.
Click to expand...
A future thinker, maybe. I will definitely agree when he starts cutting those big checks about a year from now.

But he definitely just rewrote The Art of the Deal.
 
hist78 said:
Don’t you think AI has brought everything and everyone together like one big happy family?
Click to expand...
It's kind of fun here:

Sept 2025:
Nvidia invests (up to) $100B in OpenAI as they buy GPUs and build out data centers together

Oct 2025:
OpenAI invests up to $60B in AMD as they sell GPUs / build out data centers together

The cynic in me also can't help but wonder "Is OpenAI a money laundering scheme (illegal export sales) for Nvidia?" :)
 
Daniel Nenni said:
Self preservation. A duopoly is better than a monopoly. Sam Altman is a future thinker versus a day-to-day business manager. Future thinkers had better start thinking about the foundry business as well.
Click to expand...
There are also reports that OpenAI is developing their own AI processor chip.
 
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