AMD and OpenAI Partnership: A Game Changer?
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AMD’s collaboration with OpenAI is projected to have a staggering worth of around $90 billion.
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Over the next five years, expenditures on AI infrastructure from tech companies could reach up to $4 trillion.
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While it’s unlikely AMD will surpass Nvidia in AI data center chips, it doesn’t necessarily need to lead to remain a strong long-term investment.
For anyone looking to invest $250 in a stock, there are plenty of promising choices in the expanding tech sector. However, it’s important to note that not all tech stocks are growing equally, and not every company is effectively capitalizing on the immense market for artificial intelligence (AI).
Here’s some encouraging news: one share of AMD can be acquired for about $250. This move could reap significant rewards in a few years, especially since the company has just inked a major deal with OpenAI, the creators of ChatGPT.
There are several compelling reasons to consider investing in AMD stock right now.
Recently, OpenAI announced that it will be utilizing up to 6 gigawatts of AMD’s advanced GPUs in AI-centric data centers. The first gigawatt is expected to be delivered in the latter half of 2026, and the two companies plan to intensify their collaboration to leverage their combined expertise.
As part of the deal, AMD has granted OpenAI the option to acquire up to 160 million shares of its stock if specific targets are achieved. According to AMD’s CFO Jean Hu, this agreement could translate into “tens of billions of dollars” for AMD.
Analysts speculate that if the acquisition is fully realized, AMD’s revenue could soar to an impressive $90 billion. In context, AMD’s data center revenue for 2024 was about $12.6 billion, meaning this partnership could vastly exceed current sales figures.
While no new clients for AMD have been announced yet, it’s worth noting that landing a significant GPU contract with OpenAI might pave the way for further agreements with other tech companies.
Even though AMD is considered a secondary player to Nvidia in the AI GPU space, this partnership with OpenAI could hint to other industry giants that AMD’s capabilities are credible and could meet their needs as well. Before this collaboration, predictions suggested that AMD might hold only 4% of the AI chip market by 2030, while Nvidia could command up to 67%. However, it wouldn’t be surprising if AMD’s future market share increases substantially due to this recent alliance.
The collaboration has come at a time when companies are funneling substantial investments into AI data center frameworks. Nvidia’s executives forecast that this spending could reach between $3 trillion and $4 trillion by 2030. With OpenAI as a key client, AMD could see a noteworthy portion of this expenditure shift toward its offerings in the coming years.
That said, despite this new deal, AMD still trails far behind Nvidia in the AI-only GPU market, which currently captures around 70% to 95% of the segment. It remains uncertain just how much ground AMD can gain. While the partnership may potentially yield tens of billions for AMD, there’s no guarantee.
But hey, that shouldn’t stop you from contemplating investing that $250 in AMD stock right now. With the recent partnership with such a leading AI entity, it could serve as a significant uplift for AMD in the years ahead.
Before making any investment in AMD, you might want to consider the following:
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