AMD is the latest chip company to land a massive deal with OpenAI.

Advanced Micro Devices ( AMD -1.13% ) jumped 23.7% on Oct. 6 in response to a blockbuster deal with OpenAI . The hyperscaler is taking up to a 10% stake in AMD and seeking 6 gigawatts (GW) of graphics processing units (GPUs).

Here's why the deal is meaningful for AMD investors, how it fits into OpenAI's other big moves, and a better semiconductor stock to buy instead of AMD right now.

OpenAI's road to 10 GW

The first GW of AMD Instinct MI450 GPUs is expected to be deployed in the second half of 2026. As my colleague Beth McKenna points out , this is the same time frame as Nvidia' s ( NVDA 1.68% ) deal with OpenAI.

In late September, Nvidia entered into a $100 billion strategic partnership with Open

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