11:12 AM EDT, 10/06/2025 (MT Newswires) -- Advanced Micro Devices' ( AMD ) shares surged Monday after the chipmaker agreed to deploy 6 gigawatts of its graphics processing units to power Microsoft ( MSFT ) -backed OpenAI's artificial intelligence infrastructure.

AMD will deploy the first 1 gigawatt of Instinct MI450 GPUs in the second half of next year, the companies said in a joint statement. The parent of generative AI chatbot ChatGPT will work with AMD as a core strategic compute partner to drive large-scale deployments of AMD technology.

AMD's stock jumped 28% in Monday trade, taking its gains to 74% so far this year.

"We are thrilled to partner with OpenAI to deliver AI compute at massive scale," AMD Chief Executive Lisa Su said. "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."

As part of the agreement, OpenAI received a warrant to purchase up to 160 million of AMD's shares. That would reflect a stake of up to 10%, according to MT Newswires' calculations.

The deal brings AMD "right into the core of the AI chip spending cycle and is a huge vote of confidence from OpenAI," Wedbush Securities said in a client note.

The warrant is structured to vest in tranches, with the first one tied to the initial 1 gigawatt deployment, the companies said. Vesting is subject to AMD achieving certain share-price targets and OpenAI meeting the technical and commercial milestones required to enable AMD deployments at scale.

The agreement is expected to generate "tens of billions of dollars" in revenue for AMD and be "highly" accretive to the company's adjusted earnings on a per-share basis, AMD Chief Financial Officer Jean Hu said.

"This partnership is a major step in building the compute capacity needed to realize AI's full potential," OpenAI CEO Sam Altman said. "AMD's leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster."

The deal follows Nvidia (NVDA) agreeing last month to support OpenAI with an investment of up to $100 billion to expand its computing power. Also in September, OpenAI and CoreWeave (CRWV) expanded their collaboration with a new $6.5 billion contract to help the ChatGPT parent boost its computing power.

"The last few months we have seen a major validation moment for our AI revolution bull thesis as the cloud stalwarts Microsoft ( MSFT ), Amazon ( AMZN ) , and Google ( GOOG ) are leading the charge on this unprecedented spending cycle," Wedbush analysts, including Daniel Ives, said.

"The evolution of AI spend is now spreading beyond Big Tech to governments, enterprises, energy capacity, and overall infrastructure build outs around the globe and we still believe we are in the early innings of this spending cycle," Ives said.

Price: 208.48, Change: +43.81, Percent Change: +26.60