Advanced Micro Devices’ (NASDAQ:AMD) AI infrastructure and potential stake deal with OpenAI is a “majormoment in AI revolution,” according to Wedbush.
Earlier on Monday, Microsoft (NASDAQ:MSFT)-backed OpenAI and AMD announced a partnership to deploy six gigawatts of AMD’s Instinct AI graphics processing units, or GPUs, powering OpenAI’s next-generation AI infrastructure with the first deployment of AMD MI450 GPUs set to begin in the second half of 2026.
“This is yet another validation sign that the AI Arms Race is heating up among Big Tech firms with AMD now joining the AI party as this 1996 Moment for the tech world accelerates. With a 10% stake in AMD this quickly brings Lisa Su and AMD right into the core of the AI chip spending cycle and is a huge vote of confidence from OpenAI and Altman,” said analysts led by Daniel Ives. “Any lingering fears around AMD should now be thrown out the window as this gives them a major platform to monetize the AI Revolution.”
AMD has issued OpenAI a warrant for up to 160 million shares (up to 10% ownership) of AMD common stock, the analysts added.
The analysts said that the announcement follows the Nvidia (NASDAQ:NVDA) and OpenAI news last month focused on co-optimizing roadmaps for OpenAI’s model and infrastructure software and Nvidia’s hardware and software, which is part of OpenAI’s strategy of diversifying its AI compute infrastructure for large-scale AI deployments.
Ives and his team noted that the last few months have seen a major validation moment for their AI Revolution bull thesis as the cloud stalwarts Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Alphabet’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google are leading the charge on this unprecedented spending cycle.
The analysts added that the evolution of AI spend is now spreading beyond Big Tech to governments, enterprises, energy capacity, and overall infrastructure build outs globally, and they believe they are in the early innings of this spending cycle.
“For now, AI is being driven by a handful of US Big Tech players spending almost $350 billion on Cap-Ex this year with the cavalry now coming as more enterprises and governments from around the world get into the AI spending game,” said Ives and his team.
Shares of AMD surged about 27% on Monday.