Oct. 6 (UPI) — The S&P 500 and the Nasdaq closed at record highs Monday after ChatGPT-maker OpenAI and Advanced Micro Devices reached a mega-deal that ignited a rally, despite the U.S. government shutdown entering its second week.
Chipmaker AMD shares closed 23.71% higher as the tech-heavy Nasdaq Composite rose 0.71% to end the day at a new record high of 22,941.67. The S&P 500 gained 0.36% to close at 6,740.28. Despite record closes for the Nasdaq and S&P, the Dow Jones Industrial Average dropped 0.1%.
AMD, one of Nvidia’s key rivals, announced earlier Monday it had agreed to a multi-year deal to supply chips to OpenAI, which could end-up taking a 10% stake in the chipmaker.
“Excited to partner with AMD to use their chips to serve our users!” Sam Altman, OpenAI co-founder and chief executive officer, wrote in a post on X.
“This is all incremental to our work with NVIDIA (and we plan to increase our NVIDIA purchasing over time),” Altman added.
Nvidia announced last month it would invest as much as $100 billion to help power OpenAI’s new AI models. After Monday’s news of the AMD-OpenAI deal, which boosted tech stocks and optimism for AI, Nvidia’s shares closed down 1%.
“The AI narrative continues to gain momentum,” said Louis Navellier, founder and chief investment officer of Navellier & Associates.
The deal “gives some competition for NVIDIA, which currently dominates AI chips, and accelerates the timeline for data center buildouts,” Navellier added.
OpenAI said it will deploy 6 gigawatts of AMD’s Instinct graphics processing units across multiple generations of hardware for the next few years. The first 1-gigawatt rollout of chips is expected to take place in about a year.
“We have to do this,” OpenAI president Greg Brockman told CNBC’s “Squawk on the Street.”
“This is so core to our mission if we really want to be able to scale to reach all of humanity, this is what we have to do.”