AMD signs AI chip-supply deal with OpenAI

SAN FRANCISCO, Oct 06 (Reuters): AMD said on Monday it will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10 per cent of the chipmaker. The latest deal, among a string of investment commitments, is a testament to OpenAI and the broader AI industry's voracious appetite for computing power as companies race toward developing AI technology that meets or exceeds human intelligence.

The deal offers OpenAI an opportunity to take a stake in one of Nvidia's most formidable rivals and is a major vote of confidence in Advanced Micro Devices' (AMD's) AI chips and software.

"We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry," AMD executive vice president Forrest Norrod told Reuters on Sunday.

Shares of AMD jumped more than 23 per cent in premarket trading, putting them on track to open at their highest level since March 2024, if gains hold.

The agreement covers the deployment of hundreds of thousands of AMD's AI chips, or graphics processing units (GPUs), equivalent to six gigawatts, over several years beginning in the second half of 2026.