AMD Receives Large Order from Oracle, to Deploy 50,000 AI Chips Starting in the Third Quarter of Next Year

Following its partnership with OpenAI, chip giant AMD (Advanced Micro Devices) has received another significant boost.

On October 14th, local time, cloud service provider Oracle and AMD announced an expanded partnership. Oracle will deploy 50,000 AMD Instinct MI450 chips in its data centers starting in the third quarter of 2026, using AMD's next-generation "Helios" rack design, with plans to further expand the deployment after 2027.

However, Oracle and AMD did not specify the timing of this chip deployment or the percentage of AMD's total supply that Oracle will receive.

Karan Batta, Senior Vice President of Oracle OCI (Cloud Infrastructure), said, "We believe customers will be very enthusiastic about adopting AMD chips, especially in the AI ​​(artificial intelligence) inference space."

Mahesh Thiagarajan, Executive Vice President of OCI, said, "We will continue to work with AMD to provide the most cost-effective, open, secure, and scalable cloud infrastructure to meet customer needs in the new era of AI."

This collaboration will help AMD further enhance its competitiveness against Nvidia, which remains the leading company in the AI ​​chip market. According to research firm IDC, AMD shipped approximately 100,000 AI processors in the second quarter of this year, while Nvidia shipped 1.5 million.

Recently, OpenAI and AMD announced a major agreement. OpenAI will deploy up to 6 gigawatts of AMD Instinct GPUs over the next few years. According to the agreement, the first 1 GW of equipment will be operational in the second half of 2026. AMD has also issued up to 160 million warrants to OpenAI, with exercise conditions linked to chip deployment progress and stock price milestones.

In a subsequent interview, AMD CEO Lisa Su mentioned that the Instinct MI450 graphics accelerator will utilize a 2nm advanced process, making it the world's first GPU accelerator to utilize this technology. According to reports, compared to Nvidia's Rubin chip, which is scheduled to be released next year, the MI450 offers the same FP4/FP8 computing capabilities, while also increasing total video memory capacity and memory bandwidth by 1.5 times.

A recent report from Wolfe Research indicates that AMD's earnings per share are expected to exceed $10, following the OpenAI collaboration. The firm upgraded AMD's rating from "Peer Perform" to "Outperform," with a target share price of $300.

On the other hand, Oracle, while considered a dark horse among cloud vendors, faces significant market pressure. According to recent foreign media reports, in the three months ending August 31st of this year, Oracle's cloud business, which leases Nvidia chips, generated $900 million in sales but only achieved a gross profit of approximately $125 million, representing a gross profit margin of only 14%.

Daniel Newman, CEO of research firm Futurum Group, said, "Oracle has demonstrated its willingness to invest heavily and go all-in to embrace the AI ​​era. Now it must demonstrate that, beyond computing power, it can leverage its vast underlying data and enterprise services capabilities... to add real value to the enterprise AI revolution."

On the 14th, AMD (Nasdaq: AMD) stock rose 0.77% to close at $218.09 per share, with a market capitalization of $353.9 billion. Oracle (NYSE: ORCL) stock fell 2.93% to close at $299.00 per share, with a market capitalization of $852.4 billion.