OpenAI Bets Nearly One Trillion On Chips

OpenAI signed a massive chip deal with AMD that caused the stock to jump 23.71% in one day. The deal includes a unique payment structure where OpenAI might pay using AMD’s own stock. Combined with other partnerships, OpenAI has committed close to $1 trillion in infrastructure spending, raising questions about financial sustainability.

Video – AMD CEO Su Talks About Huge Chip Deal With OpenAI

The Core Facts:

• AMD stock gained $80 billion in market value after announcing the OpenAI partnership
• OpenAI will receive up to 6 gigawatts of computing power from AMD
• Payment structure includes up to 160 million AMD shares (roughly 10% of the company)
• Total infrastructure commitments across all partnerships approach $1 trillion
• OpenAI currently lacks computing power to launch new revenue features

What caused AMD’s stock to jump so fast?

OpenAI signed a deal to buy AMD computer chips. AMD’s stock jumped 23.71% in a single day. That added $80 billion to the company’s value instantly.

The deal structure differs from typical chip purchases. OpenAI will get up to 6 gigawatts of computing power. That’s enough electricity to power 4.5 million homes.

The chips arrive starting in late 2026.

Quick insight: The market responded to both the deal size and the unique equity structure, signaling confidence in AMD’s ability to compete in AI infrastructure.

How will OpenAI pay for these chips?

OpenAI might pay for everything using AMD’s own stock. They could receive 160 million AMD shares as part of the deal.

If AMD’s stock hits $600 per share, those shares become worth $100 billion. That’s roughly enough to cover the entire chip purchase cost.

Nvidia CEO Jensen Huang called the deal “clever” but admitted surprise that AMD gave away 10% ownership before building the infrastructure.

Bottom line: The payment structure shifts financial risk to AMD while giving OpenAI massive computing capacity without immediate cash outlay.

Why does OpenAI need so much computing power?

Greg Brockman, OpenAI’s president, gave a direct answer. They can’t launch new revenue-generating ChatGPT features right now.

They don’t have enough computing power available.

“We have to do this,” Brockman told CNBC.

The AMD deal represents just one piece of OpenAI’s strategy. They have similar deals with Nvidia, Oracle, and CoreWeave. Together, these partnerships give OpenAI options for over 20 gigawatts of capacity.

What this means: Computing power shortages are blocking revenue growth, forcing OpenAI to secure infrastructure years in advance.

How much money are we talking about?

Analysts estimate OpenAI has committed nearly $1 trillion in infrastructure spending. That’s across all their recent chip deals combined.

The scale is unprecedented in tech history.

When asked how OpenAI will fund the Nvidia deal, CEO Jensen Huang admitted “They don’t have the money yet.” This reveals the circular nature of these investments where chipmakers finance their own customers.

Key point: The trillion-dollar commitment represents options and future capacity, not immediate cash payments, but the scale raises execution concerns.

Should you worry about these massive bets?

The computing power shortage reveals a bigger problem. AI companies need infrastructure faster than they can build it.

They’re making trillion-dollar commitments before proving the revenue models work.

OpenAI can’t launch features without more chips. But buying more chips requires giving away company ownership or taking on massive debt.

For entrepreneurs, this matters. If AI leaders struggle with infrastructure costs, smaller companies face even bigger challenges. The barrier to entry keeps rising with every billion-dollar deal.

Reality check: Infrastructure costs are becoming a competitive moat that favors well-funded players while pricing out smaller innovators.

What does this mean for AI’s future?

OpenAI’s moves show both ambition and constraint. They’re securing the computing power needed to compete.

But they’re also revealing how expensive AI infrastructure has become.

The question isn’t whether AI needs computing power. Everyone knows it does. The real question is whether this financing model works long-term.

You’re watching AI infrastructure costs reach levels that test financial sustainability. The industry is betting big that future revenue will justify current spending.

Final thought: The trillion-dollar infrastructure race separates AI leaders from followers, but sustainability remains unproven.

Common Questions About OpenAI’s Chip Deals

How much did AMD’s stock increase after the OpenAI deal?
AMD’s stock jumped 23.71% in a single day, adding approximately $80 billion to the company’s market value.

What is 6 gigawatts of computing power?
Six gigawatts is enough electricity to power roughly 4.5 million homes. It represents massive data center capacity for AI training and inference.

Why would OpenAI pay with AMD stock instead of cash?
The stock payment structure allows OpenAI to acquire infrastructure without immediate cash outlay while giving AMD confidence in the partnership’s long-term value.

When will OpenAI receive the AMD chips?
Delivery begins in late 2026, with full deployment happening over multiple years based on performance milestones.

How many chip partnerships does OpenAI have?
OpenAI has partnerships with AMD, Nvidia, Oracle, and CoreWeave, securing options for over 20 gigawatts of total computing capacity.

Can OpenAI afford these trillion-dollar commitments?
The commitments represent future capacity options rather than immediate payments. Nvidia CEO Jensen Huang noted OpenAI “doesn’t have the money yet,” highlighting the speculative nature of the financing.

What happens if AMD’s stock doesn’t reach $600 per share?
The deal structure includes performance-based warrants, meaning OpenAI’s equity stake depends on meeting deployment milestones and other conditions.

Why can’t OpenAI launch new ChatGPT features now?
OpenAI President Greg Brockman stated they lack sufficient computing power to launch new revenue-generating features, driving the urgent need for infrastructure deals.

Key Takeaways

• OpenAI’s AMD deal caused a $80 billion single-day stock increase, demonstrating market confidence in AI infrastructure partnerships
• The unique payment structure using AMD stock shifts financial risk while securing massive computing capacity without immediate cash
• Computing power shortages are blocking OpenAI’s ability to launch revenue-generating features, forcing aggressive infrastructure expansion
• Combined partnerships total nearly $1 trillion in infrastructure commitments, raising questions about financial sustainability
• Infrastructure costs are creating competitive barriers that favor well-funded companies over smaller AI startups
• The financing model depends on future revenue growth justifying current spending, making execution risk a critical factor
• Chipmakers are essentially financing their own customers, creating circular dependencies in the AI infrastructure ecosystem