AMD Surges as OpenAI Secures AI Chip Deal Worth Billions

AMD has secured a significant multi-year deal to supply AI chips to OpenAI, potentially generating tens of billions in revenue. This agreement, allowing OpenAI to acquire a stake in AMD, marks a major endorsement of AMD's capabilities in AI hardware. The collaboration supports OpenAI's goal to enhance its AI infrastructure.

On Monday, AMD announced a multi-year agreement to provide AI chips to OpenAI, potentially generating tens of billions in annual revenue. This collaboration allows OpenAI the chance to acquire up to a 10% stake in AMD, highlighting a powerful endorsement for AMD's advancements in AI technology.

According to AMD executive vice president Forrest Norrod, this pivotal deal is transformative for both AMD and the wider tech industry. With AMD shares soaring over 23% in premarket trading, the buy signifies AMD's growing influence, spearheading a shift in AI hardware dynamics.

The agreement outlines the deployment of vast amounts of AMD's AI chips over the coming years, with expectations of significant net revenue. As OpenAI continues to build its AI infrastructure, the deal represents a strategic step to meet its evolving needs while maintaining its partnerships, including those with Nvidia and Microsoft.

(With inputs from agencies.)