Eos Energy stock falls after Fuzzy Panda issues short report
Investing.com -- Advanced Micro Devices shares have surged well over 30% at the open on Monday after the company announced a multi-year agreement to supply artificial intelligence chips to OpenAI, a deal expected to generate tens of billions of dollars in annual revenue.
The agreement reportedly includes an option for OpenAI to acquire up to 10% of the chipmaker’s equity.
The partnership will see the deployment of hundreds of thousands of AMD’s graphics processing units, equivalent to six gigawatts, over several years beginning in the second half of 2026.
OpenAI plans to construct a one-gigawatt facility using AMD’s forthcoming MI450 series chips starting next year.
"We are thrilled to partner with OpenAI to deliver AI compute at massive scale," said Dr. Lisa Su, chair and CEO of AMD. "This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem."
OpenAI chief executive Sam Altman said the partnership would help the company build sufficient AI infrastructure to meet its requirements.
“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” Altman stated.
Meanwhile, Greg Brockman, co-founder and president of OpenAI, said that working alongside AMD will allow the company “to scale to deliver AI tools that benefit people everywhere.”
Meanwhile, reacting to the announcement, Barclays analysts said in a note that the "deal is designed to be mutually beneficial to OpenAI and AMD, and more pointedly drive the stock higher." Barclays raised its target for AMD to $300 from $200 per share.
"We realize there will be delays with these deals, and that the infrastructure required largely doesn’t exist today, but we would again highlight this as a proof point that the ecosystem is desperate for more compute versus a statement about share away from NVDA (which will likely be the knee-jerk reaction)," explained the bank.
"AMD stock is not giving this move back with the realization that more of these types of deals are likely to come (albeit smaller) over the wire through the next 6 months and the learnings from a large deployment should go miles in informing a better 500 series."