Summary
AMD has signed a deal to supply artificial intelligence (AI) chips to OpenAI, potentially bringing in tens of billions of dollars in annual revenue. After the announcement, AMD's stock price rose significantly. This partnership strengthens AMD's position in the AI chip market, allowing OpenAI an option to buy a stake in AMD.
Key Facts
- AMD will supply AI chips to OpenAI under a multi-year agreement.
- The deal could generate tens of billions in revenue for AMD yearly.
- AMD's stock surged over 34% following the announcement of the deal.
- OpenAI has the option to purchase up to 10% of AMD.
- The agreement is part of OpenAI's efforts to build extensive AI infrastructure.
- OpenAI is valued at $500 billion.
- Nvidia also has significant agreements with OpenAI, but does not involve OpenAI purchasing a stake.
- OpenAI and Microsoft previously agreed to restructure into a for-profit entity.
