AMD’s Competitive Struggles in AI Chip Market
Advanced Micro Devices (NASDAQ: AMD) is making efforts to compete with Nvidia in the artificial intelligence (AI) chip market, particularly targeting the data center sector. Following a disappointing quarterly earnings report for Q4 2025, which concluded on December 27, 2025, AMD’s stock fell by 15% on February 3, 2026. Despite these challenges, AMD reported total revenue of $34.6 billion for 2025, with the data center segment achieving a record $16.6 billion, demonstrating a 32% year-over-year growth.
Concerns have arisen around AMD’s significant deal with OpenAI, the AI startup valued at over $500 billion, which involves commitments for up to 6 gigawatts of GPU compute capacity worth around $90 billion by 2030. OpenAI’s annualized revenue stands at about $20 billion, raising questions about its ability to meet these commitments. While AMD remains focused on growing its data center business, it must navigate the uncertain landscape created by its reliance on OpenAI to ensure ongoing growth.
