Nvidia CEO Jensen Huang expressed surprise at AMD's decision to offer OpenAI up to 10% ownership in exchange for a massive chip purchase commitment. The comments came as AMD stock surged 35% this week following the multibillion-dollar partnership announcement that directly challenges Nvidia's AI chip dominance.
The AI chip wars just got a lot more interesting. Nvidia CEO Jensen Huang didn't hold back his thoughts on AMD's bold move to offer OpenAI a potential 10% stake in the company as part of their massive chip partnership announced Monday.
"It's imaginative, it's unique and surprising, considering they were so excited about their next-generation product," Huang told CNBC's Squawk Box on Wednesday. "I'm surprised that they would give away 10% of the company before they even built it. And so anyhow, it's clever, I guess."
The deal that's got everyone talking commits OpenAI to purchasing 6 gigawatts worth of chips over multiple years, including AMD's forthcoming MI450 series. In return, OpenAI receives warrants for up to 160 million AMD shares - roughly 10% of the company if fully exercised - with vesting tied to deployment milestones and AMD's stock performance.
Markets have responded with enthusiasm. AMD shares rocketed 35% this week and gained another 5% Wednesday following Huang's comments. Even Nvidia stock climbed nearly 3% as investors digested the competitive implications.
This represents the most direct challenge yet to Nvidia's stranglehold on AI computing infrastructure. While Nvidia controls an estimated 80% of the AI chip market, AMD has been scrambling to catch up alongside cloud providers developing their own silicon. The equity component makes this partnership particularly aggressive - essentially betting AMD's future on capturing a meaningful slice of OpenAI's exponential growth.
The timing creates an fascinating dynamic. Nvidia announced plans to invest up to $100 billion in OpenAI over the next decade just last month, with OpenAI committing to deploy Nvidia systems requiring 10 gigawatts of power - equivalent to 4-5 million GPUs according to Huang. Now OpenAI is hedging its bets with AMD while still being Nvidia's largest customer.
Huang emphasized the "very different" nature of Nvidia's investment, which allows direct sales to the ChatGPT creator rather than equity dilution. But when asked how OpenAI will fund their Nvidia commitment, Huang was candid: "They don't have the money yet."
