ChatGPT’s parent company will make an 11-digit bet on a chipmaker to help fuel development of data centers to power artificial intelligence.
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San Francisco-based OpenAI will buy 6 gigawatts of chips from Advanced Micro Devices at a cost of tens of billions of dollars. The partnership will also offer OpenAI the option to buy approximately 10% of AMD, according to CoStar.
The deal comes two weeks after rival AI chipmaker Nvidia announced plans to invest $100B in OpenAI to support the development of new data centers. That investment is aimed at boosting efforts to develop data centers totaling at least 10 GW of AI computing capacity.
The companies also signed a letter of intent for the partnership that ensures Nvidia’s processors provide the computing power within OpenAI’s expanding data center portfolio.
OpenAI CEO Sam Altman said the AMD partnership will accelerate the company's progress.
“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” Altman said in a statement.
Altman said on X that OpenAI also plans to increase its Nvidia purchasing over time.
The initial 1 GW of AMD’s processors are slated to come online during the second half of next year.
As part of the agreement, AMD gave OpenAI a warrant for up to 160 million shares of its common stock, structured to vest as purchases scale up to 6 GW.
The total combined capacity of the entire North American data center market is 15.5 GW, according to JLL.
As the AI-driven demand for data centers grows, most investment in the sector has gone toward new development as the industry works to deliver what could be $7T in new build-out by 2030.
Last month, OpenAI said it is building five new AI data center campuses across the U.S. as part of its $500B Stargate development partnership with Oracle and SoftBank.
Vantage Data Centers announced plans in August to invest more than $25B to develop a 1.4 GW data center campus in rural Shackelford County, Texas. Vantage’s Frontier campus, as it will be known, will consist of 10 data centers totaling 3.7M SF on 1,200 acres.
CoreWeave secured a cloud computing contract worth as much as $14.2B with Meta that will help the neocloud provider expand its data center portfolio.
The deal is part of Meta’s spending spree on building and leasing AI infrastructure that could push into the hundreds of billions of dollars.
