OpenAI and AMD have announced a multi-billion dollar chip deal

On October 6th, according to the Wall Street Journal, OpenAI and chip design company AMD (AMD. O) announced a multi-billion dollar partnership to collaborate on the development of artificial intelligence data centers that will run on AMD processors. Under the terms of the agreement, OpenAI has committed to procure AMD chips equivalent to 6 gigawatts of computing power, starting with the MI450 chips next year. OpenAI will purchase the chips directly or through its cloud computing partners. AMD's CEO said in an interview Sunday that the deal will generate tens of billions of dollars in new revenue for AMD over the next five years. The companies did not disclose the expected total cost of the program, but AMD said it would cost tens of billions of dollars per gigawatt of computing power. If OpenAI reaches certain deployment milestones, OpenAI will receive warrants for up to 160 million shares of AMD stock, or about 10% of the chip company, in phases at 1 cent per share. In addition, AMD's share price must rise for the warrants to be exercised.