In a striking financial arrangement, OpenAI has secured the option to buy 160 million shares of AMD—a 10% stake—for a mere one cent each. This “power over pennies” provision is part of a sweeping multibillion-dollar deal that makes AMD a key hardware partner for the AI pioneer.
This warrant is a strategic masterstroke, deeply aligning the interests of OpenAI with its new supplier. While the main goal is to secure hundreds of thousands of AMD’s AI chips, the equity option transforms the deal into a long-term alliance where both parties are invested in mutual success.
The primary driver for the partnership is OpenAI’s relentless need for more computing power. The deal will provide a staggering six gigawatts of capacity, the energy equivalent of three Hoover Dams. This massive infrastructure is required to train the increasingly complex AI models that OpenAI is developing.
The market responded to the news with unbridled enthusiasm. AMD’s stock price shot up by more than 30%, adding an impressive $80 billion to its market capitalization. The deal is seen as a transformative win for AMD, positioning it as a leader in the AI hardware space.
While the one-cent share option is a remarkable detail, it underscores the strategic importance of the partnership. For OpenAI, it’s a low-cost way to gain a significant upside from a key supplier’s growth. For AMD, it’s the price of securing the most important customer in AI and the industry-wide validation that comes with it.