Strategic partnership marks a massive step in AI infrastructure
Advanced Micro Devices (AMD) announced a landmark partnership with OpenAI on Monday, sending AMD stock soaring over 27% to $210.21. The agreement positions AMD as a key player in the artificial intelligence arms race, as OpenAI commits to deploying 6 gigawatts of AMD GPUs over several years, beginning with 1 gigawatt of Instinct MI450 Series GPUs in late 2026.
As part of the deal, AMD granted OpenAI a warrant for up to 160 million shares, which will vest upon reaching specific technical, commercial, and stock price milestones. If all targets are met, OpenAI could acquire around 10% of AMD. The agreement is expected to generate “tens of billions of dollars” in AI revenue annually for AMD, according to the company.
AI arms race intensifies among tech giants
OpenAI has already signed major deals with Nvidia, Oracle, Samsung, and SK Hynix, committing to invest hundreds of billions into AI infrastructure. Just two weeks ago, OpenAI partnered with AMD rival Nvidia to build out 10 gigawatts of data center capacity, with Nvidia planning up to $100 billion in investment.
Analysts say the AMD partnership underscores the urgent demand for computing power. Barclays analyst Tom O’Malley noted the deal could be worth over $100 billion to AMD over five years, reiterating a buy rating and raising the stock target to $300. Wedbush analyst Matt Bryson also called the stock rally “more than justified,” citing the deal as a key validation of AMD’s growing AI relevance.
Market reacts: AMD, Sanmina, and TSMC soar
AMD’s stock broke out of a seven-week consolidation pattern at a $186.65 buy point, according to IBD MarketSurge. The rally also lifted shares of Sanmina, which is acquiring AMD’s ZT Systems and is now a preferred manufacturing partner. Sanmina stock climbed up to 40% intraday and traded 24% higher at $141.08.
Meanwhile, AMD’s chip foundry partner TSMC saw its shares climb nearly 4% to $303.51, hitting a record high of $307.30 earlier in the session. The surge highlights broad investor confidence in AMD’s AI trajectory and its strategic supply chain.
