Related articles
TMTPOST -- Advanced Micro Devices Inc. (AMD)』s stock settled Wednesday with its biggest three-day rally after a milestone deal for the company to supply OpenAI with massive advanced artificial intelligence (AI) chips was announced.
Credit：Alibaba Cloud
AMD shares surged 11.4% to finish at $235.56, setting their highest ever close and extending their rally this week so far to 43%. That marks the stock』s best three-day run since a 52.3% stretch that ended in April 2016, according to Dow Jones Market Data.
Most of the gains came Monday, when AMD stock closed 23.7% higher and logged its largest daily jump in a year as investors turned more upbeat on a partnership between the chipmaker and OpenAI.
AMD and OpenAI reached a 6 gigawatt (GW) agreement to power OpenAI』s next-generation AI infrastructure across multiple generations of AMD Instinct graphics processing units (GPUs). The first 1 gigawatt deployment of AMD Instinct MI450 GPUs is set to begin in the second half of 2026, according to an OpenAI』s statement on Monday.
Under the agreement, OpenAI will work with AMD as a core strategic compute partner to drive large-scale deployments of AMD technology starting with the AMD Instinct MI450 series and rack-scale AI solutions, and extending to future generations. By sharing technical expertise to optimize their product roadmaps, AMD and OpenAI are deepening their multi-generational hardware and software collaboration that began with the MI300X and continued with the MI350X series.
OpenAI said the partnership creates a true win-win for both companies, enabling very large-scale AI deployments and advancing the entire ecosystem.
As part of the agreement, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock at $0.01 per share, which was structured to vest as specific milestones are achieved. The first tranche vests with the initial 1 GW deployment, with additional tranches vesting as purchases scale up to 6 GWs. Vesting is further tied to AMD achieving certain share-price targets and to OpenAI achieving the technical and commercial milestones required to enable AMD deployments at scale.
If OpenAI exercises the full warrant, it could take over around 10% ownership of AMD, based on the current number of outstanding shares.
「We are thrilled to partner with OpenAI to deliver AI compute at massive scale,」 said AMD CEO Lisa Su.「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.」 AMD is expected to see tens of billions of dollars in revenue through the partnership,Su said in a statement.
Investors took the tie-up to mean that AMD could become a viable challenger to Nvidia』s current No. 1 position in the AI chip market.
The deal with OpenAI is AMD』s largest win in its chase for market share, Stephen Guilfoyle, a 30-year veteran analyst, commented in a note. "AMD may have been in second place, but it was a distant second place. A lot less distant as of Monday morning," Guilfoyle suggested AMD has been narrowing the gap between Nvidia.
Gimme Credit senior bond analyst Dave Novosel believed that the OpenAI deal is expected to improve AMD』s profile in the AI chip sector.
"We assume the primary rationale behind the deal is that OpenAI is looking to diversify its chip suppliers," Novosel wrote on Wednesday. "Secondly, it is not clear that Nvidia could provide all of the chips OpenAI is demanding. But obviously OpenAI thinks very highly of the Advanced Micro chips, possibly prompting others to use AMD GPUs."
Mizuho analyst Jordan Klein argued the near-term picture looks good for AMD stock. Rather than zooming in on AMD』s success with its current MI355 line, it』s now a game of how quickly can the company ramp MI450 to get the full 6GW OpenAI deployment, according to Klein.
