Challenge NVIDIA! AMD and OpenAI reach a major cooperation targeting hundreds of billions of dollars in AI revenue

According to the Zhitong Finance APP, AMD and OpenAI have officially signed a final agreement to jointly promote the construction of artificial intelligence infrastructure, with AMD expecting this collaboration to potentially bring in hundreds of billions of dollars in new revenue. According to the agreement, OpenAI will deploy a total of 6 gigawatts (GW) of AMD GPU computing power over the next few years. In exchange, AMD has granted OpenAI up to 160 million stock warrants. If these warrants are fully exercised, based on AMD's current number of outstanding shares, OpenAI could hold approximately 10% of the company.

Unlike traditional procurement agreements, the collaboration between AMD and OpenAI goes far beyond a simple "cash for goods" transaction. As part of the collaboration, AMD granted OpenAI a warrant allowing it to purchase up to 160 million shares of AMD common stock in the future, with an exercise price of only a symbolic $0.01.

This means that once OpenAI completes the chip deployment and AMD's stock price reaches specific milestone targets, OpenAI will be able to acquire these shares at almost no cost, potentially becoming a 10% shareholder in this $270 billion chip giant.

Additionally, reports indicate that the exercise of some warrants is tied to AMD's stock price reaching specific targets, including a batch related to the stock price reaching $600, while AMD's closing price last Friday was $164.67. According to the details of the agreement, OpenAI's deployment plan will begin in the second half of 2026, with the first batch of warrants becoming effective upon the completion of the first 1 GW of computing power deployment. Subsequent portions will be gradually unlocked as the deployment scale expands and key technical and commercial milestones are achieved.

AMD CEO Lisa Su stated that this collaboration creates "a true win-win," enabling "the realization of the world's grandest AI construction plan" and "promoting the development of the entire AI ecosystem." OpenAI CEO Sam Altman also expressed that AMD's leadership in high-performance chips will help OpenAI "bring the benefits of advanced AI to everyone more quickly."

This collaboration is another significant data center layout for OpenAI following its $100 billion investment in AI infrastructure with NVIDIA in September this year. This investment from NVIDIA will be used to build new data centers with at least 10 gigawatts of power generation capacity, equivalent to the peak electricity demand of New York City.

Boosted by this news, AMD's stock price surged in pre-market trading, soaring over 35% at one point, reaching a high of $222. Meanwhile, NVIDIA, as the current leader in the AI chip market, saw its stock price drop over 1% in pre-market trading.

Furthermore, AMD's collaboration also focuses on competing for market share in the accelerator chip market through technological competitiveness—although AMD currently lags far behind NVIDIA in this market, its AI GPU revenue is expected to reach $6.55 billion this year, and the collaboration with OpenAI will contribute substantial profits starting in 2026, entering a phase of accelerated growth in 2027 For OpenAI, introducing AMD technology may help build alternatives outside of Nvidia—currently, Nvidia technology occupies a significant portion of the infrastructure budget with data center operators. Nvidia's data center division alone saw its revenue double to $115 billion in the latest fiscal year and is expected to continue rapid growth in the current fiscal year.

In recent years, AMD has surpassed Intel (INTC.US) in the computer processor field and successfully ventured into AI-specific chips, leading to a historic high in its market value. The enhanced financial strength supports its expansion.

AMD Chief Financial Officer Jean Hu stated, "The collaboration with OpenAI is expected to bring AMD hundreds of billions in revenue while accelerating OpenAI's AI infrastructure development, achieving significant strategic synergies, and enhancing earnings per share."

Details of the agreement indicate that the first batch of warrants will vest upon the completion of the first gigawatt computing power deployment, which is planned to start in the second half of next year. This batch of equipment will use AMD Instinct MI450 chips. Subsequent warrant vesting will be linked to achieving AMD's stock price targets and OpenAI's commercial and technical milestones for large-scale deployment of AMD technology.

It is worth mentioning that this collaboration has drawn more attention to an emerging AI "closed-loop economy" model. In this model, capital, equity, and computing power circulate among a few leading companies: OpenAI anchors a massive demand for computing power, while companies like Nvidia and AMD provide chips, and Oracle and others assist in building data centers.

Reports indicate that OpenAI is also in talks with Broadcom (AVGO.US) to develop custom chips for its next-generation models. This highly concentrated industrial ecosystem has raised concerns among analysts. They believe that if any link in this tightly interwoven system begins to weaken, it could face real pressure.

Additionally, this has dragged AMD into an increasingly intense industry debate: how the massive spending on AI infrastructure by the tech industry will be recouped, and whether the current pace of expansion is sustainable