AMD latest to partner with OpenAI in Instinct GPU deal with option to buy 10% of AMD

OpenAI has been busy lately trying to find partners that can help it meet the consumer demand of its latest AI products. The company recently signed a $100 billion deal with Nvidia which allows it to lease Nvidia GPUs to power its AI models. Now, the Sam Altman-led firm has entered a multi-year, "multi-generation" agreement with AMD.

As a part of the agreement, OpenAI will deploy 6 gigawatts of AMD's Instinct GPUs across its AI infrastructure. 1 gigawatt of the Instinct MI450 GPUs is set to begin deploying in the second half of next year, with the next to span across multiple generations, which means that when AMD releases new Instinct GPUs over the next few years, they will be the components powering OpenAI's data centers, not the obsolete MI450s.

Both companies have previously collaborated in the deployment of MI300X and MI350X GPUs. OpenAI believes that its own pioneering research as well as AMD's leadership in high-performance computing (HPC) places the two in a perfect position to dominate the AI space.

Another interesting component of this deal is that AMD is giving OpenAI the option to buy 160 million of its shares, which equates to roughly 10% of AMD stock. The first tranche will vest in the second half of 2026 once the 1 gigawatt infrastructure deployment is complete, and the next tranches will vest in subsequent years. That said, it is worth highlighting that this vesting of shares is dependent upon OpenAI meeting its commercial milestones and AMD achieving certain share price targets.

OpenAI CEO Sam Altman is quoted as saying:

This partnership is a major step in building the compute capacity needed to realize AI’s full potential. AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.

Meanwhile, AMD CEO Lisa Su noted that:

We are thrilled to partner with OpenAI to deliver AI compute at massive scale. This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.

It's worth highlighting that OpenAI is struggling to meet the compute demand of its customers across various products. It was recently reported that the secret project that it is working on with Jony Ive is facing critical challenges right now, the chief among them being computational requirements. GPU deals with Nvidia and AMD should relieve some of that pressure moving forward though.