AMD Shares Surge 24% After Announcing Multibillion-Dollar Deal With OpenAI

Topline
AMD shares surged more than 24% in premarket trading on Monday after the chipmaker announced a new multibillion-dollar deal with OpenAI, in a move that looks to challenge AI giant Nvidia, which recently announced plans to acquire a 4% stake in rival Intel.
Key Facts
The deal will see OpenAI acquire and deploy 6 gigawatt worth of AMD’s AI chips, starting with a 1 gigawatt deployment of AMD’s Instinct MI450 GPU next year.
According to an SEC filing made by AMD, the chipmaker has issued OpenAI a warrant for up to 160 million shares, roughly 10% of the company, at one cent per share, which will be vested when specific share-price milestones are met.
According to the filing, the shares will be vested in multiple tranches, tied to a rise in AMD’s stock price—which must triple to $600 for the final tranche.
AMD’s share price surged 24% to $204.50 in the premarket early on Monday, following the deal’s announcement.
This is a developing story.