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Posted October 7, 2025 at 10:00 am
Advanced Micro Devices Inc.’s (NASDAQ:AMD) multi-year deal with OpenAI could unlock $135 billion in revenue and mount a serious challenge to Nvidia Corp.’s (NASDAQ:NVDA) long-standing dominance, according to Goldman Sachs.
In a note shared Tuesday, the bank’s analyst James Schneider called the announcement “a strong positive” for the AMD’s long-term GPU business and significantly raised its earnings estimates and price target.
The AMD-OpenAI deal involves deploying a staggering 6 gigawatts (GW) of AMD GPUs—graphics processing units—to power OpenAI’s expanding data center infrastructure over the next several years.
In return, OpenAI could receive up to 160 million AMD shares—valued at around $75 billion, or roughly 10% of the company—through performance-based warrants that vest in stages as GPU deployments progress, with the final tranche triggered by the sixth gigawatt and a $600 AMD share price.
According to Goldman Sachs, the OpenAI deal represents a $135 billion revenue opportunity for AMD based on projected average selling prices for GPU deployments.
The bank now expects AMD’s earnings per share (EPS), excluding stock-based compensation, to rise by 21% in 2026 and 62% in 2027.
Goldman’s new assumptions forecast staggered GPU deployments starting with 0.25GW in 2026 and scaling to 2GW by 2030.
Based on this timeline and estimated GPU pricing of $22.5 billion per GW, AMD could see massive top-line growth while also capturing a meaningful share of the AI accelerator market currently dominated by Nvidia.
The deal also gives AMD access to OpenAI’s training stack—previously a near-exclusive Nvidia stronghold—signaling a potential shift in AI chip architecture preferences among leading developers.
Nvidia remains the clear leader in AI chips, particularly for training large language models. But the AMD-OpenAI tie-up represents a “modest incremental negative” for Nvidia. According to Goldman Sachs, it reduces the firm’s lock on OpenAI’s training workloads.
Still, the bank isn’t signaling a massive transfer of market share just yet.
Nvidia remains a key player, but it now faces an emboldened rival backed by one of the world’s most prominent AI developers.
Despite the upside, Goldman is not turning outright bullish.
The bank citing “significant customer concentration,” with OpenAI potentially accounting for more than 40% of AMD’s revenue by 2027.
There are also questions about OpenAI’s ability to secure sufficient funding to support this multi-year GPU deployment plan.
If OpenAI fails to meet its financing goals, AMD’s projected revenue gains could be delayed or reduced.
Following AMD’s 23% rally on Monday, this suggests that much of the optimism is already priced in.
The risk-reward profile, however, could improve quickly if AMD executes well and OpenAI secures continued funding. In such a scenario, Goldman said it could become “more constructive” on AMD shares in future quarters.
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Originally Posted October 7, 2025 – AMD’s OpenAI Deal Could Spark A New AI Arms Race With Nvidia
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