OpenAI Strikes Major Chip Deal with AMD to Fuel AI Expansion

In a move underscoring the intensifying competition in AI hardware, OpenAI has entered a multi-year partnership with AMD, committing to purchase chips equivalent to 6 gigawatts of capacity. The agreement, announced on Monday, positions AMD as a key supplier for OpenAI's growing computational needs and includes an option for OpenAI to acquire up to 160 million shares of AMD stock, representing approximately a 10 percent stake in the company.

The deal centers on AMD's Instinct MI450 GPUs, part of the upcoming MI400 series tailored for AI training and inference tasks. Deployment of the first gigawatt of these chips is scheduled for the second half of 2026. This collaboration builds on an existing strategic relationship, where OpenAI has provided input on the MI400 series development. The partnership aims to address OpenAI's expanding infrastructure demands as it scales models for advanced reasoning and long-context applications.

OpenAI CEO Sam Altman highlighted the necessity of diverse hardware resources during AMD's Advancing AI event. "Excited to partner with AMD to use their chips to serve our users!" Altman stated. He emphasized the broader requirements for AI advancement, noting that OpenAI needs "tons of compute, tons of memory, and tons of CPUs" alongside its existing Nvidia GPUs.

AMD executives framed the agreement as a cornerstone of sustained AI growth. Forrest Norrod, AMD's executive vice president of data center solutions, described the market dynamics: "Our view is that we’re nowhere near the top of the demand curve as every major enterprise, cloud provider, and sovereign initiative is scaling AI infrastructure in parallel." Norrod added that the company sees this as "the foundation of a long-term growth cycle for AI infrastructure, not a short-term surge." AMD CEO Lisa Su referred to Altman as a "great friend" and an "icon in AI," underscoring the personal and professional ties facilitating the deal.

Financially, the commitment involves OpenAI procuring AMD chips over several years, with the share option tied to deployment milestones. This structure allows OpenAI to gain equity in AMD as it integrates the hardware. The announcement aligns with larger investments in U.S. AI infrastructure, including a $100 billion joint venture by OpenAI, SoftBank, and Oracle for data centers, with potential scaling to $500 billion.

The partnership reflects broader industry shifts. AI infrastructure spending is projected to reach $400 billion this year, driven by enterprises, cloud providers, and national initiatives. Analysts view the deal as a milestone for AMD in challenging Nvidia's dominance in AI chips. Patrick Moorhead, a chip industry analyst, called it "a breakthrough achievement for AMD. It will be a strategic supplier for the leading AI company and this will attract even more tier 1 customers."

OpenAI's diversification strategy comes amid rapid advancements in AI models, which rely on scaling compute resources per established scaling laws. The company's feedback on AMD's MI400 series has contributed to optimizations for efficiency in training and deployment.This agreement arrives as OpenAI prepares for increased demand from its ChatGPT services and enterprise tools. The initial MI450 rollout in 2026 will support these efforts, with further purchases extending through the partnership's duration.The deal was reported on October 2, 2025, with updates reflecting ongoing developments in AI hardware supply chains.