OpenAI is significantly expanding its AI compute capacity through a series of deals with major technology firms. These partnerships, involving Nvidia, AMD, and Oracle, aim to bolster OpenAI's infrastructure for future AI advancements. OpenAI's infrastructure initiative, Stargate, is a $500 billion project to power large language models.
AMD will supply 6 gigawatts of GPU power to OpenAI over five years, with the first gigawatt scheduled for deployment in the second half of 2026. As part of the agreement, OpenAI has the option to purchase up to 160 million shares of AMD stock, contingent on achieving specific deployment milestones and AMD's stock price performance. Nvidia is investing $100 billion in OpenAI for 10 gigawatts of systems, while Oracle has a $300 billion contract with OpenAI for 4.5 gigawatts of cloud computing power over the next five years. These deals highlight the intense capital expenditure in the AI sector, with data centre spending reaching nearly half a trillion dollars last year.
These strategic alliances enable resource sharing and risk distribution, essential for undertaking massive AI buildouts. However, some analysts have expressed concerns about the sustainability of these investments and the potential for an AI bubble.
