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News Topical, Digital Desk : Shares of American chip manufacturing company Advanced Micro Devices (AMD) jumped 37% in pre-market trading on Monday after the company announced a multi-billion dollar deal with Sam Altman's company OpenAI. AMD and OpenAI signed an agreement before the market opened. Under the agreement, OpenAI will use 6 gigawatts (GW) of AMD's graphics processing units (GPUs) over several years.
OpenAI has also been issued warrants for 160 million shares (a 10% stake) in AMD, which will convert upon the achievement of set goals. One of these goals is to increase AMD's share price to $600 per share. AMD shares closed at $164 on Friday.
This announcement comes two weeks after Nvidia announced a $100 billion investment in OpenAI. Nvidia, the world's most valuable company and a competitor to AMD, plans to build AI infrastructure and data centers with a capacity of 10 GW with OpenAI. It is unclear how Sam Altman and OpenAI will fund the massive capital requirements for establishing the data centers. Altman previously spoke of a "new type" of financial instrument, but did not provide details.
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