OpenAI’s Big AMD Deal Comes With a Twist — It’ll Pay Using AMD’s Own Stock
After AMD and OpenAI announced an expanded partnership on Monday, Wall Street quickly zeroed in on one surprising detail: OpenAI won’t be paying cash for AMD’s chips. Instead, it will use AMD’s own stock to foot the bill.
As part of the agreement, OpenAI will help AMD refine its line of Instinct GPUs — the company’s answer to Nvidia’s dominance in AI chips — and will purchase up to 6 gigawatts of compute capacity from AMD over several years. AMD says the deal is worth tens of billions of dollars in revenue.
But rather than paying outright, OpenAI will receive up to 160 million AMD stock warrants. These will vest gradually as specific milestones are reached, including performance goals and sharp increases in AMD’s share price. The final tranche won’t unlock unless AMD stock hits $600 per share — a massive leap from the $165 it traded at before the announcement. Following the news, shares soared to $214 by Monday’s market close.
If AMD’s stock continues its climb, OpenAI could end up holding shares worth around $100 billion, enough to effectively fund its GPU purchases.
“The final sixth tranche requires about a $1 trillion market cap to vest — meaning OpenAI’s stake could be worth roughly $100 billion if it holds through the end,” noted UBS analyst Timothy Arcuri in a research memo.
Arcuri believes, however, that OpenAI will likely sell shares gradually to pay AMD as milestones are met. In essence, AMD is using its stock as a financing mechanism for one of its biggest customers.
Even so, analysts view the deal as a strategic masterstroke. It gives AMD an opportunity to prove that its AI GPUs can handle OpenAI-level workloads, potentially validating them for a wide range of enterprise and cloud clients.
“AMD highlighted ongoing customer discussions beyond OpenAI and expects this agreement to accelerate adoption momentum,” Arcuri added.
With OpenAI’s endorsement now in hand, AMD may finally have the credibility it needs to take the fight to Nvidia in the high-stakes world of AI compute.
In the long run, the real financiers behind OpenAI’s multi-year GPU purchase may not be the company itself — but rather AMD’s retail and institutional investors. If AMD’s stock continues to surge as part of the deal’s structure, those investors will effectively be footing the bill for OpenAI’s ambitious AI expansion.
Interestingly, Nvidia has taken a similar — yet opposite — approach. The chip giant is also bankrolling OpenAI’s growth, having announced a $100 billion investment in the company last month. The key difference is that Nvidia’s investment gives it a direct stake in OpenAI, while AMD’s arrangement does the reverse — giving OpenAI a stake in AMD.
Still, AMD’s move might have been its only viable play. By structuring a deal that minimizes upfront costs for OpenAI, AMD secures a critical foothold in one of the largest next-gen data center buildouts the world has seen. According to UBS estimates, this partnership could give AMD as much as a 30% market share in the space.
UBS analyst Timothy Arcuri concedes that AMD’s approach may seem “arguably less attractive” than Nvidia’s, but he believes it’s a strategic validation of AMD’s long-term AI roadmap — one that could spark momentum across new customers and partnerships.
“We see this as a major validation of AMD’s roadmap that could snowball to other customers,” Arcuri wrote.
With this bold financial engineering, AMD isn’t just chasing Nvidia — it’s rewriting the rules of how chipmakers can compete in the AI arms race.
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