AMD soars after striking megadeal with OpenAI that “is expected to deliver tens of billions of dollars in revenue”

OpenAI’s cash burn makes the investing world go ’round, and on Monday made shares of Advanced Micro Devices go way up along with many other AI stocks.

The chip designer surged, finishing the day up 24.7% after being the latest to strike a pact with the Sam Altman-led venture to accelerate the AI build-out, which AMD CFO Jean Hu said “is expected to deliver tens of billions of dollars in revenue.”

The deal will see AMD sell multiple generations of its flagship GPUs to OpenAI, powering 6 gigawatts of its AI infrastructure. The first deployment is slated to start in the second half of 2026.

AMD’s AI GPU sales are expected to total $6.56 billion in fiscal 2025 and $10.26 billion in fiscal 2026 — and that latter figure is likely heading higher as analysts adjust estimates following this announcement.

This accord “quickly brings Lisa Su and AMD right into the core of the AI chip spending cycle and is a huge vote of confidence from OpenAI and Altman,” Wedbush Securities analyst Dan Ives wrote. “Any lingering fears around AMD should now be thrown out the window as this gives them a major platform to monetize the AI Revolution.”

As part of this agreement, AMD has issued warrants to OpenAI that enable the ChatGPT developer to receive 160 million shares, or about 10% of the company, if certain operational and stock price targets are hit over time.

The Takeaway

The deal is just the latest in a recent series of aggressive steps from OpenAI to amass computing power for the AI boom, including substantial agreements with Broadcom and Oracle. To make good on these pacts will likely require equally aggressive moves for OpenAI to raise enough capital through private markets or, potentially, an IPO down the road.