OpenAI to finance AMD GPU purchases through stock warrants in multi-year partnership

AMD and OpenAI have announced an expanded multi-year partnership, under which OpenAI will help AMD refine its Instinct GPUs, designed to compete with Nvidia, and purchase 6 gigawatts of compute capacity. Instead of paying with its own funds, OpenAI will use AMD stock warrants, potentially up to 160 million shares, that vest as milestones are achieved. The final tranche requires AMD shares to reach $600 each, while they traded around $165 prior to the announcement and rose to $214 immediately after. Analysts note that OpenAI may sell shares along the way to fund GPU purchases, effectively turning AMD’s stock into a financing tool for its largest AI customer. The deal not only generates significant revenue for AMD but also validates its GPUs for AI workloads, potentially attracting other clients and expanding market share. While the arrangement is less direct than Nvidia’s investment in OpenAI, it gives AMD a strategic foothold in the AI data center market, with potential stakes worth billions if all milestones are met. In essence, AMD is using financial engineering to ensure adoption of its hardware by one of the fastest-growing AI companies.