#nvidia-competition

#nvidia-competition

( Advanced Micro DevicesNASDAQ:AMD) shocked investors yesterday with a landmark multi-year agreement to supply OpenAI with 6 gigawatts of its Instinct graphics processing units (GPUs), starting with 1 gigawatt in the second half of 2026. The deal, which could generate tens of billions in annual revenue for AMD, includes a warrant allowing OpenAI to acquire up to 160 million shares - roughly 10% of the company - for a nominal fee, tied to deployment milestones and stock price targets up to $600 per share.

Under the five-year deal, OpenAI will purchase up to 6 gigawatts of AMD's most advanced AI processors, a level of computing capacity equivalent to the peak electricity demand of London. The partnership is designed to provide OpenAI with the infrastructure it needs to scale its technology as competition in the AI sector intensifies. Shares in AMD surged 27 per cent to $209.39 in New York trading after the deal was announced, adding tens of billions of dollars to the chipmaker's market value.

The AMD deal arrived on the heels of OpenAI CEO Sam Altman's Asia tour last week, during which OpenAI inked memory chip agreements with Samsung and SK Hynix and reportedly held discussions in Taiwan with TSMC, the world's largest contract manufacturer of chips. The moves suggest OpenAI is aggressively diversifying its chip supply chain beyond Nvidia - a shift that could complicate OpenAI's relationship with Nvidia, whose GPUs still power much of OpenAI's training infrastructure.