NVIDIA CEO Jensen Huang Reacts to AMD's Surprising OpenAI Deal

Reviewed byNidhi Govil

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NVIDIA CEO Jensen Huang expresses surprise at AMD's decision to offer OpenAI a 10% stake in exchange for a multi-billion dollar AI chip deal. The move intensifies competition in the AI semiconductor market.

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AMD's Surprising Deal with OpenAI

In a move that has caught the attention of the tech industry, AMD has entered into a multibillion-dollar partnership with OpenAI, offering the AI company the option to acquire a significant stake in AMD. This deal, which includes the provision of AMD's upcoming Instinct MI450 GPUs, has prompted a reaction from NVIDIA CEO Jensen Huang, who described the arrangement as "unique and surprising"

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The Details of the Deal

AMD has committed to supplying OpenAI with six gigawatts of computing power over several years, including future shipments of their MI450 series accelerators. As part of this agreement, OpenAI has received warrants for up to 160 million AMD shares, which could make them one of AMD's largest shareholders if fully exercised

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Jensen Huang's Reaction

In an interview on CNBC's Squawk Box, Huang expressed his surprise at AMD's decision:

"I'm surprised they would give away 10 percent of the company before they even built it," he said. "It's clever, I guess."

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Huang's comments highlight the unusual nature of the deal, especially considering that AMD's next-generation product is still in development.

Contrasting Approaches: NVIDIA vs. AMD

Huang contrasted AMD's approach with NVIDIA's own investment package announced in September. NVIDIA has committed up to $100 billion to OpenAI over the next decade, tied to a requirement that OpenAI deploy systems consuming 10 gigawatts of electrical capacity

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Unlike AMD's equity-based agreement, NVIDIA's deal structure allows for direct sales to OpenAI. Huang emphasized NVIDIA's comprehensive infrastructure capabilities:

"We're the only company in the world today that really focuses on building the entire AI infrastructure," Huang stated

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Intensifying Competition in the AI Chip Market

The deal between AMD and OpenAI is widely seen as an attempt to challenge NVIDIA's dominance in the AI semiconductor market. AMD CEO Lisa Su has previously described the company's MI300X accelerator as a strong alternative to NVIDIA's GPUs

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However, some industry analysts have questioned the structure of the AMD-OpenAI deal, suggesting that giving away equity in exchange for revenue commitments may be risky

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Market Impact and Future Outlook

The competition between NVIDIA and AMD in the AI chip market is expected to intensify. AMD's CEO Lisa Su anticipates generating $100 billion from the OpenAI partnership over the coming years

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As the AI industry continues to grow, both companies are positioning themselves to capitalize on the increasing demand for high-performance computing solutions. The outcome of this competition could significantly shape the future of AI infrastructure and development.

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