OpenAI agrees to multi-billion dollar AI chip-supply deal with AMD
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The news: OpenAI has agreed to buy tens of billions of dollars’ worth of chips from Advanced Micro Devices (AMD) as part of a deal that could see OpenAI take an almost 10% stake in the chipmaker over time.
The numbers: The two companies signed a definitive agreement for OpenAI to deploy 6 gigawatts of AMD GPUs over several years, the companies said in a statement.
AMD has also given OpenAI a warrant for up to 160 million shares of its common stock, which will vest as milestones are achieved to “further align strategic interests” between the companies. The warrant would be offered at an exercise price of USD0.01 over time and would require AMD to achieve certain share-price targets and OpenAI deploying its chips. The deal would equate to a roughly 10% stake in the company.
Shares in AMD jumped 25% in pre-market US trading on the news.
The context: While the companies did not disclose a total figure on the investment, the FT reports that OpenAI executives have estimated that 1GW of capacity costs around USD50 billion to bring online, with two-thirds of that amount spent on the supporting chips and infrastructure.
The agreement comes two weeks after AMD competitor Nvidia announced plans to invest up to USD100 billion ($151.65 billion) in OpenAI to build massive AI data centres powered by its chips.
What they said: “This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” said Sam Altman, co-founder and CEO of OpenAI. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
“Building the future of AI requires deep collaboration across every layer of the stack,” said Greg Brockman, co-founder and president of OpenAI. “Working alongside AMD will allow us to scale to deliver AI tools that benefit people everywhere.”
