AMD will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.

AMD will supply up to 6 gigawatts of AI GPUs to OpenAI, with the first deployment scheduled for late next year. OpenAI has received a warrant to buy up to 160 million shares of AMD as part of the deal.

Advanced Micro Devices (AMD) deal with OpenAI (OPENAI) to provide up to 6GW of artificial intelligence infrastructure has the potential to provide extended benefits to AMD and several other companies as well,

The deal calls for OpenAI to establish 6 gigawatts of computing capacity using AMD’s chips over the next several years. Those chips are the most direct competitor to Nvidia’s AI processors that generate more than $146 billion in annual data center revenue now and are expected to run up to $226 billion worth of annual sales in the next 12 months,

The deal is a huge shot in the arm for AMD, which has been playing second fiddle to Nvidia in the GPU game for the last several years. While Nvidia's stock is up over 1,300% in the last three years as it became the largest publicly traded company in the world, AMD is up a comparatively soft 200% in the same period.

OpenAI signed a deal in May to build out a one-gigawatt data center complex in the United Arab Emirates, a deal that was brokered by the Trump administration. Oracle, Nvidia, Softbank, Cisco and G42, a royals-backed Emirati AI company, are set to back the project.

OpenAI partners with semiconductor giant AMD to utilize next-generation graphics processing units for powering AI advancements.

The five-year deal will commit OpenAI to purchasing six gigawatts worth of AMD’s GPUs for its AI data centers.

The five-year agreement will challenge Nvidia’s market dominance and gives OpenAI 10% of AMD if it hits milestones for chip deployment.