After OpenAI, AMD signs chip deal with Oracle: What this may mean for its biggest rival Nvidia

Oracle Cloud Infrastructure (OCI) has announced that it plans to deploy 50,000 Advanced Micro Devices (AMD) graphics processors starting in the second half of 2026. OCI will utilise AMD's Instinct MI450 chips, which were unveiled earlier this year.

These chips are AMD’s first AI processors that can be assembled into a larger rack-sized system, enabling 72 of the chips to function as a single unit. This capability is necessary for creating and deploying the most advanced AI algorithms.

What AMD’s newest deal mean for Nvidia

This move signals that cloud providers are increasingly adopting AMD's GPUs as a viable alternative to Nvidia's market-leading products for artificial intelligence workloads.“We feel like customers are going to take up AMD very, very well — especially in the inferencing space,” said Karan Batta, senior vice president of Oracle Cloud Infrastructure. Inference in AI is defined as the process of using a trained machine learning model to make predictions or decisions on new, unseen data.Recently, AMD announced a partnership with AMD wherein the AI startup will purchase 6 gigawatts worth of AMD chips over multiple years, including the forthcoming MI450 series. Furthermore, as part of the agreement, OpenAI will receive warrants for up to 160 million AMD shares.

This means that if OpenAI exercises the full warrant based on deployment volume and AMD's share price, the Al firm could acquire roughly 10% ownership in AMD.The company is "investing at the right pace because we want to accelerate ... this is a place where [and] when companies and partners make bold moves, it will be rewarded”, AMD CEO Lisa Su said at an interview recently.Su added, “I really believe that this is the beginning of a 10-year kind of supercycle.”“We believe with the proper use of Al compute, you can solve diseases faster. You can do much faster drug discovery. You can do much better in terms of diagnosing issues that people have early on and that makes ... a personal difference in people's lives,” she noted.