OpenAI strikes multibillion-dollar deal with AMD to challenge Nvidia’s AI dominance

In a significant move that could reshape the artificial intelligence (AI) hardware landscape, OpenAI and Advanced Micro Devices (AMD) have announced a multibillion-dollar partnership.

This new deal is aimed at developing next-generation AI data centres, a direct challenge to industry leader Nvidia.

Under the agreement, the Sam Altman-led AI company will purchase 6 gigawatts worth of AMD chips, beginning with the company’s upcoming MI450 processors next year.

The ChatGPT maker will acquire the chips either directly or through its cloud partners, according to the companies.

AMD CEO Lisa Su said the partnership could generate tens of billions of dollars in new revenue for the chipmaker over the next five years.

While the total cost of the deal remains undisclosed, AMD noted that each gigawatt of computing capacity costs “tens of billions of dollars.”

As part of the deal, OpenAI will receive warrants for up to 160 million AMD shares, roughly 10% of the company, at just one cent per share.

Taking to X (formerly Twitter), OpenAI CEO Sam Altman announced the partnership. Altman said the partnership will help meet skyrocketing demand for inference computing, the process that enables AI models like ChatGPT to respond to queries.

“It’s hard to overstate how difficult it’s become to get enough computing power,” Altman said.

For AMD, the agreement represents its largest breakthrough yet in the race to compete with Nvidia’s powerful AI chips.

Although AMD’s processors dominate gaming and traditional data centres, the company has lagged in the supercomputing segment vital for advanced AI applications.