Advanced Micro Devices shares soared more than 20% in premarket trading on Monday, October 6, 2025, after announcing a landmark partnership with OpenAI. The multi‑year agreement will see OpenAI deploy up to 6 gigawatts of AMD’s Instinct graphics processing units, with the AI company potentially acquiring up to 10% ownership in the chipmaker. This deal represents one of the largest GPU deployment agreements in the artificial‑intelligence industry and positions AMD as a key strategic partner alongside Nvidia in powering the next generation of AI infrastructure.
AMD Strengthens AI Ambitions With OpenAI Equity Partnership
OpenAI will deploy 6 gigawatts of AMD Instinct GPUs over multiple years beginning with a 1‑gigawatt rollout in the second half of 2026 using AMD’s forthcoming MI450 series chips. The deployment will span multiple hardware generations as OpenAI builds out massive AI infrastructure to support its models. OpenAI CEO Sam Altman stated that “AMD’s leadership in high‑performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.” AMD CEO Lisa Su described the partnership as “a true win‑win enabling the world’s most ambitious AI buildout.”
As part of the deal structure, AMD issued OpenAI a warrant for up to 160 million shares of common stock, with vesting tied to deployment milestones and AMD’s share price performance. The first tranche vests with the first full gigawatt deployment, with additional tranches unlocking as OpenAI scales toward 6 gigawatts and meets technical and commercial milestones. If OpenAI exercises the full warrant based on current shares outstanding, it would acquire approximately 10% ownership in AMD. The companies declined to disclose the specific dollar value but confirmed the deal is worth billions annually.
This partnership allows OpenAI to diversify its chip supply beyond its recent $100 billion agreement with Nvidia announced two weeks earlier. For AMD, securing OpenAI as a flagship customer validates its Instinct GPU roadmap after years of trailing Nvidia in the AI accelerator market. The deal reinforces OpenAI’s transformation into one of the most aggressive infrastructure builders in the AI sector through its Stargate project, with sites planned across Texas, New Mexico, Ohio, and the Midwest.
AMD Stock Breaks Above 52‑Week Highs on Investor Optimism
AMD shares closed at $164.67 on Thursday, October 3, down $5.06 or 2.98%. Following the partnership announcement, the stock jumped to $202.30 in premarket trading at 7:22 AM EDT on Monday, October 6, representing a gain of $37.63 or 22.85%. This surge pushed AMD shares above their previous 52‑week high of $186.65, with the stock having traded in a range of $76.48 to $186.65 over the past year. The dramatic premarket move reflected strong investor enthusiasm about AMD securing a major position in the generative AI infrastructure market.
Prior to the announcement, AMD had a market capitalization of $267.234 billion with a trailing P/E ratio of 99.20 and a more attractive forward P/E of 28.57, suggesting investors anticipated significant earnings growth. The stock has delivered strong performance year‑to‑date with a 36.33% return compared to 14.18% for the S&P 500, though its one‑year return of just 1.12% lagged the broader market’s 17.82% gain. Analyst price targets for AMD range from a low of $125.10 to a high of $230.00, with an average target of $186.00, which the premarket price already exceeded.
The partnership had ripple effects across the semiconductor sector, with Nvidia shares falling 1% in premarket trading as investors recognized AMD as a credible alternative supplier for large‑scale AI deployments. Analysts view the deal as expanding the competitive landscape rather than directly threatening Nvidia’s dominant position. The agreement also highlights the increasingly circular nature of AI’s corporate economy, where a handful of companies trade capital, equity, and compute resources in tightly interconnected relationships that create both opportunities and concentration risks across the industry.