Open AI announces billion-dollar purchase of | Political News
Artificial intelligence company OpenAI will start buying chips from semiconductor producer AMD as half of a deal to scale its AI infrastructure, the company announced on Monday.
The deal is the latest transfer signaling the ChatGPT maker’s efforts to scale its company output amid the worldwide race to construct AI computing assets, according to a joint assertion saying the deal. The settlement will also permit OpenAI to buy up to a 10% stake in AMD, the announcement said.
It comes after OpenAI CEO Sam Altman triggered a panic after eerily remarking that the AI push will require large “changes to our social contract” following a historic $500 billion investment by the Trump administration into AI.
Under the phrases of the deal, OpenAI will buy the latest model of the company’s high efficiency graphics chips, the Instinct MI450, which is anticipated to debut next yr.
The settlement calls for supplying 6 gigawatts of computing energy for OpenAI’s “next generation” AI infrastructure, with the first batch of chips value 1 gigawatt to be deployed in the second half of 2026.
AMD also issued OpenAI with a warrant permitting the AI company to buy up to 160 million shares of AMD’s common stock. That quantities to about 10% of company based on AMD’s 1.6 billion excellent shares. The warrant will vest based on two milestones tied to the quantity of computing energy deployed, as nicely as unspecified “share-price targets.”
Shares of AMD spiked 25% before the opening bell Monday. Shares of Nvidia, which have repeatedly set new record-highs this yr, fell barely.
“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,” OpenAI CEO Sam Altman, said in a news release. “AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”
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The deal is a enhance for Santa Clara, Calif.-based AMD, which has been left behind by rival Nvidia. But it also hints at OpenAI’s need to diversify its provide chain away from Nvidia’s dominance.
The AI increase has fuelled demand for Nvidia’s graphics processing chips, sending its shares hovering and making it the world’s most invaluable company.
Last month, OpenAI and Nvidia announced a $100 billion partnership that will add at least 10 gigawatts of data middle computing energy.
The Associated Press contributed to this report.
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