Advanced Micro Devices (AMD) and OpenAI announced a multi-year partnership on Monday to develop AI data centers, which the chipmaker said would generate tens of billions of dollars in new revenue over the next five years.

AMD’s share price surged more than 30 per cent before markets opened on news of the agreement, which would see the company deliver six gigawatts worth of chips to the ChatGPT maker.

According to a joint statement, AMD will supply the California-based start-up with graphics processing units (GPUs) that are key to the development of artificial intelligence.

The partnership shows OpenAI moving to diversify its supply of semiconductors so that it does not depend solely on the US powerhouse Nvidia.

In late September, Nvidia and OpenAI signed a contract for more than $100 billion in equipment intended to increase OpenAI’s generative AI capabilities.

Analysts say AMD is facing competition from — in addition to Nvidia — China’s Huawei, as well as Amazon and Google.

Under the deal, on Monday, AMD will issue OpenAI 160 million “warrants”  — a financial product that can be converted to shares under certain conditions.

AFP