**AMD Shares Soar 25% Following Major AI Chip Supply Deal with OpenAI**
*By Mudit Dube | October 6, 2025*
Advanced Micro Devices (AMD) has entered into a multi-year agreement to supply artificial intelligence (AI) chips to OpenAI, marking a significant milestone for both companies. This landmark deal is expected to generate tens of billions of dollars in annual revenue for AMD and offers OpenAI an option to acquire up to a 10% stake in the chipmaker.
The partnership serves as a strong endorsement of AMD’s AI chips and software capabilities and aligns with the company’s strategic efforts to deepen its presence in the fast-expanding AI market.
**Market Reaction: Shares Surge 25%**
Following the announcement, AMD shares jumped 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,” highlighting its potential to reshape the AI chip landscape.
The agreement involves deploying hundreds of thousands of AMD AI chips and graphics processing units (GPUs), representing a capacity of six gigawatts over several years beginning in the second half of 2026.
**OpenAI to Establish 1-Gigawatt Facility Using AMD Chips**
A key component of the deal includes OpenAI’s plan to establish a one-gigawatt facility powered by AMD’s next-generation MI450 series chips starting next year. This facility is expected to kickstart revenue generation for AMD shortly thereafter.
AMD anticipates that this partnership, combined with ripple effects from other customers, could bring in more than $100 billion in new revenue over the next four years.
**Context and Industry Impact**
OpenAI CEO Sam Altman expressed confidence that the collaboration with AMD will help the organization build sufficient AI infrastructure to support its ambitious projects.
This development follows NVIDIA’s announcement to invest up to $100 billion in OpenAI and supply at least 10 gigawatts of its systems. Meanwhile, OpenAI continues to work on developing its own AI-specific silicon in partnership with Broadcom, underscoring its multi-faceted approach to building robust AI hardware capabilities.
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This deal marks a pivotal moment in the AI hardware sector, emphasizing AMD’s growing influence and OpenAI’s commitment to scaling its AI infrastructure through diverse strategic partnerships.
https://www.newsbytesapp.com/news/business/amd-inks-multi-year-ai-chip-deal-with-openai/story