RULES:COMPANY-OPENAI

AMD ‌Secures ‌AI Chip Supply Deal⁢ with OpenAI,Stock Jumps Over​ 34%

SAN FRANCISCO,Feb 29 – Advanced micro Devices ⁣(AMD) shares surged ‌more than 34% in extended trading Thursday after the company announced a‌ multi-billion‍ dollar ‍deal to ⁢supply artificial intelligence (AI) chips to⁣ OpenAI,the ⁤creator of chatgpt. ‍The agreement positions AMD as a key hardware⁤ partner for the leading AI developer and signals growing demand for chips ‍beyond​ Nvidia ‍in the rapidly expanding AI market.

The partnership ⁣addresses a critical bottleneck in the AI boom: the availability of ​specialized⁤ hardware. OpenAI, like many⁤ AI companies, relies on powerful⁤ processors to train and run its large language models. While Nvidia currently dominates this ⁣space, diversifying the supply⁤ chain is crucial for fostering competition ⁤and ensuring‍ the continued growth‍ of AI​ technologies. This deal is expected to significantly⁢ boost AMD’s ‌revenue and market share in the AI sector, ‍challenging Nvidia’s current ‌stronghold.

AMD will provide‌ its Instinct ​MI300 series of data center GPUs ⁤to ‌power OpenAI’s workloads. The ​agreement includes a commitment from ⁢OpenAI to utilize AMD’s ⁤chips for years to come, providing AMD with a stable revenue stream and a platform​ to showcase its AI capabilities.

“This is a important​ win ⁤for AMD, validating ‍their⁤ investment in the Instinct line and establishing ‌them as a serious​ contender in the AI chip​ market,”‍ said Stacy Rasgon, a semiconductor analyst at Bernstein. “The deal​ demonstrates‍ that OpenAI ‍is willing to work with ​multiple vendors, which is ​a positive sign for the industry as a⁤ whole.”

The financial terms ‍of⁣ the deal ⁣were not disclosed, but AMD indicated it expects⁤ to begin recognizing revenue from the partnership ⁤in the second quarter of 2024.⁣ The company anticipates the deal will⁣ contribute meaningfully to its data center revenue growth​ in the coming years.

AMD’s stock closed at $167.89 on Thursday and was trading at $225.80 in ⁤after-hours trading as of 6:30 PM EST.