Shares of Advanced Micro Devices climbed 9% on Tuesday, after earlier surging as much as 14%, following news of an expanded multi-year agreement to supply graphics processors for artificial intelligence infrastructure.
Under the partnership, AMD will provide its Instinct GPUs to support large-scale AI deployments. The companies plan to scale infrastructure capacity to 6 gigawatts, with initial shipments supporting the first gigawatt expected to begin in the second half of 2026. The system will use a customized Instinct GPU based on the MI450 architecture, along with 6th-generation EPYC processors, codenamed Venice.
The deployment will run on AMD’s Helios rack-scale system architecture, which was jointly developed through the Open Compute Project and introduced in 2025.
As part of the agreement, AMD granted warrants allowing the partner to purchase up to 160 million shares of AMD stock. These shares will vest gradually as shipment milestones are reached, beginning with the first gigawatt and continuing through the full 6-gigawatt rollout.
The partner has already been using AMD’s EPYC processors and Instinct GPUs in its AI infrastructure and will also adopt upcoming EPYC chips optimized for specialized workloads.
AMD’s Chief Financial Officer Jean Hu said the deal is expected to support revenue growth over several years and improve earnings performance.
Analysts See Strong Financial Impact
Analysts noted that the partnership could generate substantial long-term revenue. Estimates suggest each gigawatt deployment could generate between $15 billion and $20 billion in revenue, with meaningful contributions to earnings per share even after accounting for stock dilution.
The agreement also helps address investor concerns about possible delays in AMD’s next-generation AI chip rollout and signals stronger competitiveness in the AI hardware market.
Some analysts noted the deal could increase competitive pressure on other semiconductor companies that supply custom AI chips, although the overall impact remains uncertain.
Overall, the partnership strengthens AMD’s position in the fast-growing AI infrastructure market and is expected to significantly support its financial outlook and stock performance over time.
