**AMD Shares Surge 25% on Multi-Year AI Chip Supply Deal with OpenAI**
*By Mudit Dube | October 6, 2025*
Advanced Micro Devices (AMD) has secured a landmark multi-year agreement to supply artificial intelligence (AI) chips to OpenAI. This deal is anticipated to generate tens of billions of dollars in annual revenue for AMD and includes an option for OpenAI to acquire up to a 10% stake in the chipmaker.
The agreement signifies a major endorsement of AMD’s AI chips and software, marking a significant step in the company’s efforts to expand its presence in the fast-growing AI market.
**Market Reaction**
Following the announcement, AMD’s shares skyrocketed by 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.”
Under the terms of the agreement, AMD will deploy hundreds of thousands of AI chips, including graphics processing units (GPUs), with a combined power usage equivalent to six gigawatts over several years, starting from the second half of 2026.
**OpenAI to Establish 1-Gigawatt Facility Using AMD Chips**
As part of the collaboration, OpenAI plans to set up a one-gigawatt facility powered by AMD’s next-generation MI450 series chips beginning next year. This facility is expected to be a revenue driver for AMD starting from that period.
AMD anticipates that this deal will generate over $100 billion in new revenue across four years, fueled not only by OpenAI but also by other customers attracted by the ripple effects of this partnership.
**Industry Context and CEO Comments**
OpenAI CEO Sam Altman expressed optimism about the agreement, stating it would help the company build the AI infrastructure required to meet its growing needs.
This move follows NVIDIA’s announcement to invest up to $100 billion in OpenAI and supply at least 10 gigawatts worth of AI systems. Meanwhile, OpenAI continues to develop its own AI silicon in collaboration with Broadcom.
The AMD-OpenAI deal underscores the intensifying competition and rapid advancements in AI hardware, positioning AMD as a critical player in the next wave of AI innovation.
https://www.newsbytesapp.com/news/business/amd-inks-multi-year-ai-chip-deal-with-openai/story
