AI Giant OpenAI Diversifies Chip Supply with Major AMD Partnership
OpenAI, the creator of ChatGPT, has entered into a groundbreaking multi-year partnership with Advanced Micro Devices (AMD) to develop specialized AI data centers, marking a significant expansion of its computing infrastructure strategy.
The partnership, announced Monday, is expected to generate tens of billions of dollars in revenue for AMD over the next five years, with the chipmaker set to provide six gigawatts worth of chips to OpenAI. The news sparked immediate market enthusiasm, sending AMD’s share price soaring by 35 percent at market opening.
The collaboration is part of OpenAI’s broader Stargate project, an ambitious $500 billion initiative aimed at establishing massive data centers across the United States. The project, which has already secured $400 billion in funding, includes facilities planned for Texas, New Mexico, and an undisclosed location in the Midwest.
This AMD deal follows OpenAI’s existing $100 billion agreement with Nvidia, the current market leader in AI chips. OpenAI CEO Sam Altman clarified on X that the AMD partnership would complement, not replace, their relationship with Nvidia, stating, “This is all incremental to our work with NVIDIA (and we plan to increase our NVIDIA purchasing over time). The world needs much more compute…”
The agreement’s financial structure includes 160 million warrants issued to OpenAI, potentially allowing the AI company to acquire approximately 10 percent of AMD’s shares under specific conditions.
OpenAI has also secured chip partnerships with South Korean manufacturers Samsung and SK Hynix, demonstrating its strategy to diversify semiconductor suppliers. This move comes as the company, despite operating at a loss due to massive computing costs, maintains its position as the world’s most valuable private company, surpassing SpaceX with a $500 billion valuation.
Market analysts note that AMD faces competition not only from Nvidia but also from China’s Huawei, Amazon, and Google in the rapidly expanding AI chip market. While AMD primarily generates revenue from CPU sales, this partnership signals its ambitious push into the more powerful GPU market essential for AI development.
The financing details for these substantial investments remain unclear, as OpenAI continues to operate at a loss while expanding its computing capabilities for future AI development.
