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AMD is rallying after unveiling a major AI infrastructure partnership with OpenAI. The deal includes a 6 gigawatt agreement to power OpenAI's next-gen AI systems using multiple generations of AMD Instinct GPUs, starting with the MI450 series.

• The first 1 gigawatt deployment of Instinct MI450 GPUs begins in 2H26.
• AMD expects the deal to be highly accretive to adjusted EPS.
• There's also a significant equity component: AMD issued OpenAI a warrant for up to 160 mln shares of AMD common stock. The warrant vests in tranches as deployment milestones are met, starting with the 1 GW rollout.

Why it matters: This is a breakthrough moment for AMD. While Nvidia (NVDA) remains the leader in AI chips, this deal serves as a powerful endorsement of AMD's capabilities in high-performance compute. It positions AMD as a credible alternative for hyperscalers and enterprises looking to diversify their supply chains beyond Nvidia—potentially reshaping AI infrastructure procurement strategies. Nvidia shares are ticking lower on the news, reflecting concerns about increased competition and possible pressure on pricing power in the AI space.

Briefing.com Analyst Insight:

This is the kind of strategic win AMD bulls have been waiting for. The partnership with OpenAI not only validates AMD's GPU roadmap but also elevates the company into the top tier of AI infrastructure players. Importantly, the warrant structure aligns OpenAI's incentives with AMD's long-term success, and the scale of the agreement (6 GW) is massive.

That said, execution risk remains high—especially given the MI450 won't deploy until 2H26. The stock's move today is justified based on potential, but the real test will be AMD's ability to deliver competitive performance, supply, and ecosystem support at scale. For now, this deal shifts the AI narrative from "Nvidia vs. everyone" to something far more competitive.