AMD shares surge 25% on chip supply deal with OpenAI
**AMD Shares Surge 25% on Chip Supply Deal with OpenAI**
*By Mudit Dube | Oct 06, 2025, 05:18 PM*
Advanced Micro Devices (AMD) has signed a landmark multi-year agreement to supply artificial intelligence (AI) chips to OpenAI. This deal is expected to generate tens of billions of dollars in annual revenue for AMD and grants OpenAI the option to acquire up to a 10% stake in the chipmaker.
The partnership serves as a major endorsement of AMD’s AI chips and software, marking a significant step in the company’s strategy to expand its presence in the rapidly growing AI market.
### Market Reaction: AMD Shares Jump 25%
Following the announcement, AMD’s stock surged 25% in premarket trading. Forrest Norrod, AMD’s Executive Vice President, described the deal as “certainly transformative, not just for AMD, but for the dynamics of the industry.”
The agreement involves deploying hundreds of thousands of AMD AI chips and graphics processing units (GPUs), equivalent to six gigawatts, over several years starting from the second half of 2026.
### OpenAI to Establish 1-Gigawatt Facility Using AMD Chips
As part of the deal, OpenAI plans to set up a one-gigawatt facility utilizing AMD’s next-generation MI450 series chips beginning next year. This facility is expected to start generating revenue for AMD from that point onward.
The company anticipates that the ripple effect of this agreement, combined with other customer engagements, will bring in more than $100 billion in new revenue over the next four years.
### Industry Context and CEO Statements
OpenAI CEO Sam Altman stated that the deal with AMD would enable the company to build sufficient AI infrastructure to meet its evolving needs.
This agreement follows NVIDIA’s announcement to invest up to $100 billion in OpenAI and supply at least 10 gigawatts of its systems, highlighting the competitive landscape in AI chip supply.
Additionally, OpenAI has been developing its own silicon for AI applications in partnership with Broadcom, signaling multiple strategic moves to secure its AI hardware requirements.
—
This multi-billion dollar partnership highlights AMD’s growing influence in the AI hardware space and underscores the expanding demand for high-performance AI processing solutions.
https://www.newsbytesapp.com/news/business/amd-inks-multi-year-ai-chip-deal-with-openai/story
