US EditionAMD, OpenAI Deal Could Spark A New AI Arms Race With Nvidia - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD)
OpenAI's multibillion-dollar deal with AMD includes warrants for up to 10% equity and will deploy six gigawatts of GPUs to support expanding AI infrastructure.
- On Monday, OpenAI and Advanced Micro Devices Inc. announced a multi-year deal to deploy up to six gigawatts of AMD Instinct GPUs, starting with a 1-gigawatt rollout using Instinct MI450 GPUs in 2026.
- Following its Nvidia Corp. deal and Oracle cloud agreement, OpenAI is diversifying suppliers to reduce Nvidia reliance, after a $100 billion hardware deal and a $300 billion cloud pact last month.
- Financially, the deal includes warrants that could give OpenAI up to 160 million shares and Goldman Sachs projects a $135 billion revenue opportunity, raising AMD's price target to $210.
- Markets reacted immediately as AMD stock surged over 28 percent while Nvidia shares slipped more than one percent in Monday trading, and both firms plan regulatory approval filings quickly.
- Looking ahead, Goldman Sachs projects AMD's EPS excluding stock-based compensation to rise 21% in 2026 and 62% in 2027, with GPU deployments starting at 0.25GW and scaling to 2GW by 2030.
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OpenAI’s massive spending raises sustainability questions
The NewsAs the eye-watering AI investment deals keep coming, skeptics are starting to ask: Where is the money?Monday’s deal between AMD and OpenAI shows both the markets’ AI enthusiasm and the financial experiments being launched to pay for it all. Some are warning that AI spending is unsustainable and circular, as companies prop up money-losing customers. “OpenAI is in no position to make any of these commitments,” one analyst told the Financia…
After Massive OpenAI Deal, Is AMD Stock Still a Buy?
Key Points Advanced Micro Devices (AMD) announced a 6-gigawatt GPU supply deal with OpenAI yesterday, sparking a 24% stock rally. The agreement includes a warrant for OpenAI to gain up to 10% ownership in AMD via milestone-based shares. This validates AMD’s AI tech and projects $100 billion in four-year revenue from OpenAI and partners. It sounds nuts, but SoFi is giving new active invest users up to $1k in stock, see for yourself (Sponsor) …
AMD signed a multi-year agreement to supply its artificial intelligence chips to OpenAI, in what could be the largest contract in the company’s history. The plan contemplates the implementation of 6 gigawatts of GPU from 2026, beginning with a first phase of 1 gigawatt. Something like plugging in a whole city just so ChatGPT thinks faster. Sam Altman described the agreement as key to “achieve the full potential of the AI,” while AMD expects reve…
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