Chipmaker Advanced Micro Devices Inc. (AMD) shares jumped up to 38% in pre-market trading on Monday, October 6. Because the company has made several billion dollars deal with Sam Altman’s Openai.
AMD has a direct competition from NVidia, which is the most valuable company in the world. NVIDIA plans to invest up to $ 100 billion in Openai. The capacity of its data center will be at least 10 GW. The deal came in just two weeks of NVIDIA’s investment planning.
What was the deal between AMD-Openai?
AMD and Openai have signed an agreement before the market opens. Under this, Openai will use 6 GW (GW) AMD graphics processing units (GPUS) in the next few years. Openai has also received warrants for 160 million shares of AMD or 10% stake, which will change when the next set goals are completed.
Openai will have a part of the share given to AMD’s warrants only will be valid or they will get authority over when AMD’s share price is reaching $ 600. AMD shares closed at $ 164 on Friday.
How will financeing be
It is not yet clear how Sam Altman and Openai will fund such a huge expenses. He had earlier mentioned ‘a new type of financeing tool’, but did not expand. AMD’s CEO LISA SU said that the company is excited to give AI compute on a large scale by partnering with Openai.
Altamaine said that this partnership is a big step in achieving AI’s full potential and AMD’s high-performance chips will help Openai the technique to reach the technology rapidly and more people.
How much benefit amd
AMD’s AI GPU Revenue is expected to reach $ 6.55 billion this year. The deal with Openai will benefit from next year and will grow faster from 2027. Officials estimate that the deal will take the total topline of AMD to cross $ 100 billion, although the deadline was not clarified.
The first Gigawatt Chips will rollout in the second part of 2026. Then the first tank of warrants given by AMD to Openai will also be wasted.
Stock market response
After this news, AMD shares increased by 38% in pre-market trading, while NVIDIA shares fell by 1.5%. However, Intrade rose by 38.23% to a high -booking AMD shares to make high $ 226.71 per share. The AMD shares gained 28.31% to $ 211.29 till 11.40 am by US time.
AMD’s market cap is at 33.83 thousand million dollars. At the same time, NVIDIA is far ahead in this case. It is the world’s most valuable company with a market cap of $ 4.52 million.
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