AMD said on Monday it will supply artificial intelligence chips to OpenAI in a multiyear deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10 per cent of the chip maker.

The deal offers OpenAI an opportunity to take a stake in one of Nvidia’s most formidable rivals and is a powerful endorsement of Advanced Micro Devices’ (AMD’s) AI chips and software.

Shares of AMD AMD-Q jumped more than 23 per cent in premarket trading.

“We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry,” AMD executive vice president Forrest Norrod told Reuters on Sunday.

The agreement covers the deployment of hundreds of thousands of AMD’s AI chips, or graphics processing units (GPUs

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