AMD: A Rather Good Show, Don’t You Think?

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One observes, with a certain detached amusement, that Advanced Micro Devices – AMD, to those in the know – rather outperformed the market in 2025. A rise of 77.3%, according to those diligent chaps at S&P Global Market Intelligence. The S&P 500 itself managed a perfectly respectable, but frankly rather pedestrian, 16.4%, while even Nvidia – usually so reliably bullish – trailed at 38.9%. One begins to suspect there’s a bit more to this story than meets the eye.

For the first nine months of the year, AMD and Nvidia danced a rather predictable jig, both comfortably above the general market. But then, in October, AMD took a decided lead. The reason? A rather substantial commitment from a key player in the artificial intelligence game – a firm named OpenAI – to purchase a considerable quantity of AMD’s Instinct chips over the next few years. One anticipates a rather profitable few years, actually.

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A Most Generous Handshake with OpenAI

On October 6th, OpenAI – the clever people behind ChatGPT – announced a multi-year contract. Six gigawatts of AMD Instinct AI accelerators are to be installed in their data centres over the next five years. A rather impressive number, don’t you think? And, as if that weren’t enough, the deal includes stock warrants for up to 160 million AMD shares. Approximately 10% of the company. One can’t help but admire their audacity. Or perhaps it’s simply good business.

Shipments begin in the second half of 2026, ramping up to larger volumes and next-generation chips in 2027. AMD’s CEO, Lisa Su, called it a “win-win.” How terribly predictable. Sam Altman of OpenAI highlighted AMD’s high-performance products. Naturally. The stock, predictably, skyrocketed 26% on the Monday. One does believe OpenAI understands the power of a well-timed announcement.

Why OpenAI’s Vote of Confidence Matters, Darling

Let’s consider the numbers, shall we? One AMD Instinct card draws roughly 1,000 watts. Six gigawatts, therefore, equates to approximately six million processors. The current generation MI350 cards are priced around $20,000 apiece, and the improved MI 450 series – and subsequent generations over the five-year deal – are likely to be even more… discerning. This translates to a revenue opportunity of $120 billion or more. Not insignificant, wouldn’t you agree?

This deal, one suspects, was rather more than just a transaction. It was a signal. If OpenAI believes AMD chips are worth a multi-year commitment of this magnitude, one anticipates other hyperscalers will give the Instinct series a whirl. It’s the sort of thing that creates a… ripple effect. Rather like dropping a rather expensive pebble into a perfectly still pond.

One must note, however, that OpenAI isn’t putting all its eggs in one basket. They inked an even larger chip-supply contract with Nvidia two weeks prior to the AMD announcement. But, curiously, it barely moved Nvidia’s stock. Wall Street, it seems, had already anticipated such a development. How terribly pedestrian.

The OpenAI partnership, you see, proves that AMD can compete with Nvidia where it truly matters. If you were waiting for a substantial AI win before investing in AMD stock, OpenAI has just provided you with six gigawatts of reasons to reconsider. One suspects it’s a rather good show, don’t you think?

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2026-01-15 15:14