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Advanced Micro Devices (AMD) is increasingly being recognized as an alternative to NVIDIA as it has secured a deal to supply Oracle with 50,000 Instinct MI450 chips starting in the second half of 2026. On the 14th of this month, Oracle announced that it will deploy these chips, which were unveiled by AMD earlier this year. The Instinct MI450 chip is AMDs first AI chip designed to operate in large rack-sized systems, capable of integrating 72 chips into a single unit. It is known for its efficiency in creating and deploying advanced AI algorithms.

On the same day, as tensions in U.S.-China trade relations flared up, the majority of AI-related and semiconductor stocks saw a decline. However, AMDs stock rose by 1.8%, while Oracles shares fell by 4% and NVIDIAs shares dropped by 3.7%.

Karin Bata, Senior Vice President of Oracle Cloud Infrastructure, expressed optimism, stating that customers will have a very positive reception of AMD in the inference domain.

AMDs CEO, Lisa Su, presented the MI450 chip alongside OpenAIs CEO, Sam Altman, at an event held in June. Earlier this month, OpenAI entered into a supply agreement with AMD for processors totaling 6 gigawatts over several years. If the chip deployment proceeds smoothly, OpenAI could obtain 160 million shares of AMD stock, representing a 10% ownership stake in the company.

Currently, NVIDIA dominates the data center GPU market with over 90% market share, significantly outpacing AMD. OpenAI has maintained a close relationship with NVIDIA, utilizing their chips for the development of ChatGPT, and NVIDIA even invested in OpenAI in September.

Despite NVIDIAs stronghold, the deal between AMD and Oracle, along with OpenAIs commitment to AMD, signals a potential shift in the landscape of AI and semiconductor markets, positioning AMD as a formidable competitor.

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