This text first appeared on The Motley Idiot’s U.S. web site.
Superior Micro Gadgets (NASDAQ: AMD) inventory was up greater than 28% in buying and selling Monday morning after the semiconductor firm introduced an enormous cope with ChatGPT proprietor OpenAI. The deal requires OpenAI to take a ten% stake in AMD, price as much as 160 million shares, and may have AMD present round 6 gigawatts of graphics processing models (GPUs) to OpenAI.
The deal is a large shot within the arm for AMD, which has been enjoying second fiddle to Nvidia within the GPU recreation for the final a number of years. Whereas Nvidia’s inventory is up over 1,300% within the final three years because it turned the biggest publicly traded firm on the planet, AMD is up a relatively comfortable 200% in the identical interval.
AMD knowledge by YCharts
However which may be altering. Whereas Nvidia nonetheless guidelines the roost, AMD has been catching up this yr. In reality, its inventory efficiency doubled that of Nvidia’s to date in 2025. Will its cope with OpenAI assist AMD proceed to shut the hole?
In regards to the deal
Based on AMD, the definitive settlement to energy Open AI’s infrastructure will roll out over a number of generations of OpenAI’s infrastructure, beginning with the preliminary 1 GW buy of AMD Intuition MI450 GPUs to start within the second half of 2026.
The deal requires AMD to problem OpenAI a warrant for as much as 160 million shares of AMD widespread inventory that might vest as particular milestones are achieved. The primary tranche of the warrant vests with the primary 1 GW deployment and continues as OpenAI purchases extra GPUs to achieve 6 gigawatts.
“We’re thrilled to companion with OpenAI to ship AI compute at large scale,” AMD CEO Lisa Su mentioned. “This partnership brings the most effective of AMD and OpenAI collectively to create a real win-win enabling the world’s most bold AI buildout and advancing the complete AI ecosystem.”
AMD’s chief monetary officer and govt vp, Jean Hu, mentioned that AMD’s relationship with OpenAI will ship “tens of billions of {dollars} in income for AMD.”
The underside line
The AMD-OpenAI deal is the latest in a sequence of transactions made by the nation’s largest chipmakers as firms race to scale. Nvidia lately introduced a $100 billion cope with OpenAI, in addition to a US$5 billion stake in Intel, which is competing with AMD within the central processing unit (CPU) area. OpenAI additionally has a $300 billion cope with Oracle to buy cloud tools.
If AMD can notice administration’s prediction for tens of billions in further income from its OpenAI deal, AMD inventory ought to stay a viable different to Nvidia for traders who wish to put money into AI infrastructure. And when you think about that AMD has by far outperformed Nvidia in 2025, it seems the inventory will proceed to have a major runway for development.
