AMD Secures Strategic AI Partnerships with Alibaba and OpenAI

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Advanced Micro Devices (AMD) has announced two significant strategic developments as the year draws to a close, potentially strengthening its competitive stance in the artificial intelligence chip market. The company is reportedly set to fulfill a major order from Chinese technology conglomerate Alibaba while also forging a long-term alliance with leading AI research firm OpenAI.

One of the most consequential moves is a deepening partnership with OpenAI. According to reports, AMD is slated to supply "hundreds of thousands" of its GPUs starting in the second half of 2026. This hardware will be critical for scaling OpenAI's computational capacity to a target of 6 gigawatts. A notable clause in the agreement grants OpenAI an option to acquire up to a 10 percent equity stake in AMD.

This collaboration serves as a powerful endorsement of AMD's data center technology, positioning it as a credible alternative to industry leader Nvidia. The deal provides a tangible growth trajectory for AMD's ambitious data center business, which aims to reach $100 billion in annual revenue within five years. This goal follows a strong third-quarter performance where revenue hit $9.25 billion, marking a 35.6 percent year-over-year increase.

Major Chinese Market Penetration

Simultaneously, AMD is making substantial inroads in China. Tech industry sources, including TechNode and TS2 Tech, reported on December 26 that Alibaba plans to place an order for between 40,000 and 50,000 units of the AMD MI308 Accelerator. This specific chip is designed to comply with current U.S. export regulations.

In a decisive move to secure the business, AMD's CEO Lisa Su indicated the company's willingness to absorb a 15 percent export fee, as noted by Reuters. This aggressive pricing strategy underscores the importance of the Chinese market to AMD's growth plans. The company had previously anticipated a $1.5 billion revenue shortfall in 2025 due to export restrictions; the Alibaba deal could significantly offset that projected gap.

Progress on Next-Generation GPU Architecture

On the product development front, AMD has reached a key milestone for its future graphics technology. Industry outlet NotebookCheck reported that the company has successfully completed the "tape-out" for its next-generation RDNA 5 GPU architecture using TSMC's advanced N3P manufacturing process. While a launch is not expected until mid-2027, this progress is crucial for the long-term roadmap, with potential applications in future gaming consoles and high-performance gaming graphics cards.

Upcoming Financial Report and Market Sentiment

Investor attention now turns to the company's fourth-quarter earnings, scheduled for release on February 3, 2026. Market experts are forecasting revenue of approximately $9.6 billion. Key points of interest will be any early revenue recognition from the Alibaba agreement and management's commentary on how the absorbed export fees will impact profit margins. The current analyst consensus maintains a "Moderate Buy" rating on AMD shares, with price targets ranging from $240 to $277.