AMD Skyrockets on Massive OpenAI Chip Deal

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•  06 Oct 2025
 

•   NVDA  
   
  -1.12%

The artificial intelligence arms race just took a dramatic turn as OpenAI, the powerhouse behind ChatGPT, signed a multibillion-dollar deal with American chipmaker $AMD. This landmark agreement includes the purchase of six gigawatts of advanced MI450 chips, representing computing power massive enough to run millions of servers and expand OpenAI's capabilities tenfold over the coming year. It marks the largest deal of its kind since partnerships with Nvidia and signals a new era of fierce competition in the AI chip market, resembling what some are calling a technological cold war.

The announcement, reported in The Wall Street Journal, comes as OpenAI faces mounting pressure to scale its computing infrastructure amid intensifying competition from Google and Microsoft. Sam Altman, OpenAI's chief executive, described the partnership as strategic, stating it would provide the tools necessary to build the next generation of artificial intelligence. For $AMD, this represents a golden opportunity. The deal is expected to generate tens of billions in revenue and accelerate company growth by thirty percent over the next year.

The agreement centers on OpenAI's commitment to purchase an enormous quantity of MI450 chips, an innovative model developed specifically for machine learning and large language models. Six gigawatts of computing power enables the operation of millions of servers, allowing OpenAI to increase its capabilities by ten to twenty times in the coming year. This builds on a previous partnership from July 2025, when the companies collaborated on developing chips customized for large language models, transforming $AMD from a secondary player into a serious challenger to $NVDA, which currently dominates ninety percent of the AI chip market.

Altman has been actively seeking global chip partnerships in recent months, including investments in Japan and Singapore, specifically to reduce dependence on Nvidia. The financial advantage is significant as $AMD chips cost twenty to thirty percent less than competitors, enabling OpenAI to build ten gigawatts of data center capacity by 2027. That computing power is sufficient to train advanced models like GPT-5 or GPT-6.

Market reaction has been swift and telling. $AMD stock is soaring in pre-market trading while $NVDA shares are declining, a clear signal that investors recognize a genuine threat to Nvidia's dominance. Analysts are calling this a new phase in the AI revolution, one that will force other manufacturers like Intel to accelerate similar developments. The deal demonstrates that the gaps between chip manufacturers may be closing faster than expected, and the question of whether $AMD can truly compete with Nvidia is being answered in real time. With OpenAI's massive computing needs and AMD cost advantages, this partnership could reshape the landscape of artificial intelligence infrastructure for years to come.

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