Advanced Micro Devices (NASDAQ:AMD) shares surged premarket Monday following a landmark agreement with OpenAI to deploy up to 6 gigawatts of AMD Instinct GPU power for the tech giant's next-generation AI infrastructure.
The initial phase will see a 1-gigawatt rollout of AMD Instinct MI450 GPUs in the second half of 2026, with plans for subsequent expansions across multiple generations of AMD's data center chips.
Under the agreement, OpenAI will designate AMD as a core compute partner, leveraging the MI450 series and rack-scale AI solutions.
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The collaboration will also extend into next-generation hardware and software development. Both companies will share technical expertise to align product roadmaps and optimize performance, building on a partnership that began with AMD's MI300X accelerators and continued through the MI350X series.
As part of the deal, AMD issued OpenAI a warrant for up to 160 million AMD shares, vesting in tranches tied to deployment milestones.
The first tranche coincides with the initial 1-gigawatt rollout, with further vesting linked to expansions up to 6 gigawatts, as well as share-price and infrastructure benchmarks.
AMD Chief Financial Officer Jean Hu described the partnership as having the potential to generate "tens of billions of dollars in revenue" and be "highly accretive" to AMD's adjusted earnings per share.
AMD stock breached its 52-week high of $186.65 on Monday, trading at $219.99 at the time of publication, a 33.59% increase.
The announcement follows Nvidia's (NASDAQ:NVDA) recent $100 billion commitment to OpenAI, which includes plans to deploy at least 10 gigawatts of Nvidia's Vera Rubin systems starting in the second half of 2026. Bank of America Securities analyst Vivek Arya described Nvidia's move as both a bold financial commitment and a strategic moat expansion, estimating the partnership could generate $300 billion to $500 billion in long-term revenue, a potential three- to five-fold return on investment.
Arya noted that Nvidia's collaboration with OpenAI strengthens its position in the global AI buildout while intensifying competitive pressure on peers such as Broadcom (NASDAQ:AVGO) and AMD. He also highlighted that Nvidia's $100 billion deployment represents a strategic use of its free cash flow, with projected margins of 40–50% on future AI-driven revenue streams.
Photo by Poetra.RH via Shutterstock
AMD Price Action: Advanced Micro Devices shares were trading higher by 33.59% to $219.99 premarket at last check Monday.
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