AMD shares climbed 11% on Wednesday, extending a remarkable weekly rally that has lifted its stock by 43% so far. This surge comes after OpenAI announced plans to purchase billions of dollars worth of AI equipment from AMD. The chipmaker's market capitalization reached $380 billion following a 4% gain on Tuesday and a 24% jump on Monday.

OpenAI's agreement with AMD includes the potential to acquire up to a 10% ownership stake in the company, contingent on stock price and partnership milestones. This deal represents one of AMD’s most significant market moves in recent years, marking its best weekly performance since April 2016.

AMD Emerges as a Strong Contender Against Nvidia in AI Chips

The partnership signals a potential shift in the AI chip market, historically dominated by Nvidia. Investors view the collaboration as evidence that AMD could challenge Nvidia’s leading position. AMD’s growing role in AI infrastructure aligns with OpenAI’s ambition to expand large-scale AI deployments.

Nvidia CEO Jensen Huang responded to the news with surprise during an interview on CNBC’s Squawk Box. He described the deal as “imaginative,” “unique,” and “surprising,” especially since OpenAI is taking a 10% stake before AMD’s next-generation AI products are even released. Huang called the move “clever,” though unexpected.

CEO Lisa Su on the Strategic Importance of the OpenAI Partnership

Lisa Su, AMD’s Chair and CEO, emphasized the strategic value of the OpenAI deal, describing it as a “win-win” situation. She highlighted that AMD’s AI chips are capable of supporting “at-scale deployments,” referring to very large data centers like those built by OpenAI and cloud service providers.

Su’s remarks underscore AMD’s readiness to meet the growing demand for AI infrastructure hardware, positioning the company as a critical player in the rapidly evolving AI ecosystem.

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This article was created with AI assistance.