AMD’s shares surge on deal to supply AI chips to OpenAI

In a multi-year agreement, American chipmaker AMD will supply artificial intelligence chips to OpenAI, which will generate tens of billions of dollars in annual revenue and give the ChatGPT creator the option to purchase up to 10% of the business.

When the deal was announced, the chipmaker’s shares increased by more than 34 percent on Monday, putting them on track for their biggest day gain in more than nine years, and boosting the company’s market value by about $80 billion.

The deal, which is the most recent in a&nbsp, a&nbsp, and a string of investment commitments, &nbsp, highlights OpenAI&nbsp and the broader AI industry’s eagerness to develop AI technology that meets or exceeds human intelligence.

Forrest Norrod, executive vice president of AMD, told the Reuters news agency, “We view this deal as undoubtedly transformative, not just for AMD, but also for the dynamics of the industry.”

Deal assists in “validating technology.”

The partnership strengthens ties between AMD, one of AMD’s strongest rivals, and the startup at the heart of the AI boom, which recently agreed to make significant investments in OpenAI.

Analysts said it was a significant vote of confidence in AMD’s AI chips and software, but it unlikely to dent Nvidia’s leadership, as the market leader continues to sell every single AI chip it can produce.

The deal’s executives anticipate generating tens of billions in annual revenue. AMD anticipates receiving more than $100 billion in new revenue from OpenAI and other customers over the course of four years due to the impact of the agreement, according to them.

According to LSEG data, the chipmaker is anticipated to have generated $ 32.78 billion in revenue this year. Analysts anticipate that Nvidia will report revenue of $ 20.26 billion for the upcoming fiscal year.

“AMD has trudged past Nvidia for a while. Therefore, I believe it helps to validate Concurrent Asset Management’s technology, according to Leah Bennett, the company’s chief investment strategist.

Nvidia’s stock dropped by more than 1%.

Sam Altman, the CEO of OpenAI, claimed the AMD deal will enable his startup to develop sufficient AI infrastructure to meet its requirements.

How OpenAI would finance the enormous deal was still a mystery.

According to media reports, OpenAI, &nbsp, a company with a $ 500bn valuation, generated about $ 4.3 billion in revenue in the first half of 2025 and burned through $ 2.5 billion in cash.

Nvidia announced in September that it would provide OpenAI with at least 10 gigawatts of its systems.

Nvidia will invest $100 billion in the ChatGPT parent in contrast to the startup’s agreement with AMD, which stipulates in the terms of the September announcement.

By purchasing AMD, OpenAI could have the ability to influence corporate strategy. According to Dan Coatsworth, head of markets at A J Bell, OpenAI is merely the client and not a part-owner.

For many years, OpenAI has collaborated with AMD and contributed to the design of more recent AI chips.

A non-binding agreement was signed last month by the startup and its main supporter, Microsoft, to convert OpenAI into a for-profit organization.