OpenAI’s Massive Bet and the Chip War Heats Up – Market Overreaction?

So, OpenAI just threw AMD a lifeline. Don’t get me wrong, they weren’t doing terribly, but instead of a slow, gradual process of catching up, OpenAI basically cured the (troubled) chip maker. It’s a bit like being in rehab and going to physiotherapy every day with the prospect of running again in three years, and then Jesus shows up and gives you the power to fly. Sam Altman announced a massive deal to buy up to 6 gigawatts worth of AMD’s MI450 chips, starting next year. On top of that, OpenAI secured warrants for up to 160 million AMD shares. That’s not a minor “strategic partnership” — that’s OpenAI saying, “Fine, Nvidia, we’ll see other people.” Though the burning question is: “Why?”

AMD’s stock, of course, took off faster than a ChatGPT answer — up more than 30% since the news. Interesting though is that Nvidia’s stock didn’t even flinch. Yes, this is massive for AMD, but for Nvidia, the one customer won’t meaningfully tip the scales. But let’s consider something for a second: is this AMD’s breakout moment, or just a case of market hype-induced fever?

This deal finally puts AMD on the AI map — in a real way. Not just as Nvidia’s shadow, but as an actual second option. This is what so many investors have preached about: AMD will catch up to Nvidia. But let’s be real. This is not a definitive declaration of war against Nvidia’s market position, but rather a first stone thrown — although it might be a big one, and a meaningful one in hindsight. The timing couldn’t be better: demand for compute is exploding, Nvidia’s pricing is high (why not, it’s the undisputed leader), and everyone’s desperate for alternatives. If AMD executes — and that’s a big if — they could carve out a serious piece of the market.

But let’s not forget: Nvidia isn’t exactly shaking in its titanium sneakers. They still control over 70% of the AI chip market, and more importantly, the software ecosystem that actually makes the chips usable. Jensen Huang still holds all the aces up his sleeve — this announcement won’t rattle him. At the moment, Nvidia’s moat seems almost insurmountable, even with competitors closing partnerships. AMD is like Alfa Romeo wanting to be Ferrari and striking a partnership with a big customer. But that doesn’t make them a prancing horse. Just because you claim you can do something doesn’t make it a guarantee.

So yes, the OpenAI deal is huge. It’s validation, it’s progress, and it’s noise — the kind that gets headlines and retail money flowing (as we see right now). But whether it’s the start of a new era or just a short-term flu in the great chip war… we’ll see.

For now, let’s just say this: AMD finally got invited to the party. Now it has to prove it can dance without tripping over its own cables. And let’s keep in mind who the DJ is: Jensen Huang with his DJ deck, Nvidia.

$AMD (+0,9 %)
$NVDA (+0,18 %)

Today’s partial sales in $AMD (+0,9 %) and $ASML (+0,2 %)

Both companies fundamentals are stronger than ever, but that doesn’t mean I won’t take profits on the way up. My cash reserves are ready for a pullback in either of these stocks or for any other opportunities the market presents.

Congratulations to all investors of $AMD (+0,9 %)

I have sell 20-25% of the stocks and I’ve bought $WM (+0,16 %)

Just seen $AMD (+0,9 %) jump 35%.. so happy to have bought half a year ago.

$AMD (+0,9 %)

The deal involves the development of 6 gigawatts of $AMD (+0,9 %) Instinct GPUs for AI, with OpenAI acquiring the right to purchase approximately 10% of AMD shares at a very low price, if the conditions of the agreement are met. The partnership is considered crucial for AMD's expansion into the rapidly growing artificial intelligence market.

AMD is expected to generate tens of billions of dollars in revenue over the next few years, approaching $100 billion within four years, thanks to the production and supply of its advanced GPUs that will power OpenAI’s data centers. The company, led by CEO Lisa Su, has already introduced new GPU series such as the MI350 and is designing new rack-scale infrastructures for high performance, aiming to directly compete with Nvidia in the AI ​​hardware market.

AMD is not stopping there, as it has also expanded its partnerships with other players in the AI ​​market, such as Cohere. With the ever-increasing demand for computing power in artificial intelligence, AMD is laying a solid foundation to become a giant in this field, offering high-performance solutions and reducing costs for customers like OpenAI. The agreement with OpenAI and AMD's dynamic future in the AI ​​space is expected to attract strong investment interest, promoting the company to a new phase of its growth trajectory.