AMD Shares Skyrocket After Securing Landmark GPU Supply Agreement With OpenAI – ( $AMD $NVDA )

Published Oct 06, 2025
Market News
NVIDIA

By John F. Heerdink, Jr.

Advanced Micro Devices (NasdaqGS: AMD) soared on Monday after signing a blockbuster, multiyear supply agreement with OpenAI that could redefine the balance of power in the red-hot artificial intelligence chip market. Under the terms, OpenAI will purchase up to 6 gigawatts of AMD’s latest-generation Instinct GPUs — a commitment believed to put tens of billions in revenue on AMD’s ledger and grant OpenAI the right to acquire as much as 10% of AMD’s equity if both parties meet ambitious milestones.

AMD Secures Transformative AI Partnership

The deal, detailed by executives from both companies, marks AMD’s largest-ever single customer contract and a major strategic pivot for OpenAI as it seeks to broaden its hardware supply chain beyond Nvidia — the current industry heavyweight. Beginning with a 1-gigawatt rollout in 2026 using AMD’s forthcoming MI450 series chips, the multi-phase plan will see OpenAI deploy up to 6 gigawatts of compute capacity across several chip generations, with further tranches dependent on performance and financial milestones.

Financial Structure Ties AI Ambitions to AMD Stock

A distinctive element of the announcement is the innovative equity structure: OpenAI has been issued warrants to buy up to 160 million AMD shares at one cent each—amounting to nearly 10% of the company—if it rolls out chips at scale and if AMD’s share price meets successive targets, culminating in a $600-per-share threshold for the final tranches. This arrangement, which market analysts interpret as “structural reconfiguration” of AI infrastructure financing, sharply aligns the future success of both firms, effectively tying AMD’s long-term valuation to the acceleration of OpenAI’s infrastructure projects.

Market Reaction and Wider Implications

Following the news, AMD shares soared as much as 30% in Monday trading—marking the chipmaker’s largest single-day surge since 2016 and lifting the tech-heavy Nasdaq index in the process. Analyst commentary widely framed the agreement as a direct challenge to Nvidia’s dominance, with AMD’s leadership touting the partnership as transformative not just for the company, but for the broader semiconductor ecosystem.

The Sum…

OpenAI, for its part, is expected to maintain some Nvidia (NVDA) purchases going forward, but the AMD deal signals a broader industry pivot as major AI developers pursue greater resilience and optionality in their supply chains. The strategic wager is clear: as AI demand outstrips supply, chip customers and vendors alike are reimagining alliances, shifting the sector’s tectonic plates in the process.