OpenAI has entered a major agreement with AMD to use the chipmaker’s processors in new data centres, just weeks after signing a $100 billion deal with dominant rival Nvidia.
The artificial intelligence company will begin deploying AMD chips in the second half of next year across separate facilities from those committed to Texas, New Mexico, Ohio and an unnamed Midwest location, reports The New York Times.
The unusual arrangement allows OpenAI to purchase up to 160 million AMD shares at a penny per share, potentially giving the AI startup a 10 per cent stake in the chipmaker whilst providing additional capital for data centre construction.
OpenAI plans to deploy enough AMD chips to consume 6 gigawatts of power over several years – enough to supply all households in Massachusetts – compared to 10 gigawatts committed under its recent Nvidia agreement.
“This partnership is a major step in building the compute capacity needed to realize A.I.’s full potential,” said OpenAI chief executive Sam Altman.
The deal represents a significant opportunity for AMD to challenge Nvidia’s dominance in AI chips, where the market leader sells an estimated 90 per cent of graphics processing units vital for AI development. AMD shares jumped more than 20 per cent in premarket trading following the announcement, whilst Nvidia stock declined slightly.
The agreement forms part of massive industry spending on data centre infrastructure, with OpenAI, Amazon, Google, Meta and Microsoft planning to invest more than $325 billion combined on new facilities by year-end.
Unlike cash-rich tech giants, OpenAI has pursued creative financing arrangements to fund its ambitious expansion plans, including the $400+ billion Stargate Project with Oracle and SoftBank. The startup has increasingly raised capital from companies providing its essential products and services.
The partnership gives AMD a major customer for its processors whilst closely aligning the chipmaker with the company leading the AI boom.
