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Advanced Micro Devices, Inc. (AMD) has entered a multibillion-dollar partnership with OpenAI, joining Broadcom and Nvidia in significant AI collaborations. The agreement, announced on a recent Monday, includes deploying up to 6 gigawatts of AMD’s Instinct GPUs for OpenAI’s AI infrastructure starting in the second half of 2026. This deal is expected to generate tens of billions in revenue over the next five years, marking a critical shift as OpenAI diversifies away from Nvidia.
As of now, AMD shares surged by over 30% since the announcement and reached a new 52-week high of $226. Year-to-date, AMD’s stock has increased by 70%, outpacing Broadcom’s and Nvidia’s respective growth of approximately 40%. The partnership also includes a warrant for up to $160 million shares, potentially giving OpenAI a stake of about 10% in AMD, contingent on meeting certain milestones.
AMD’s revenue forecasts are positive, with total sales expected to rise 27% in fiscal year 2025, from $25.79 billion to $32.81 billion, and an anticipated 19% increase to $39.1 billion in fiscal year 2026. The company’s annual earnings per share are projected to rise significantly, indicating a robust outlook in light of this major agreement.
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