Oracle Bets on AMD with 50,000 AI Chips in 2026, Challenging Nvidia’s Market Grip
Oracle Cloud Infrastructure announced plans on Tuesday to deploy 50,000 Advanced Micro Devices (AMD) graphics processors starting in the second half of 2026, signaling a major shift in the cloud AI race.
Following the news, AMD shares rose about 2%, while Oracle fell 4% and Nvidia slipped more than 3%, reflecting investor reactions to growing competition in the GPU space.
The move underscores how cloud providers are increasingly positioning AMD’s Instinct MI450 chips as a viable alternative to Nvidia’s market-leading GPUs for artificial intelligence workloads. Oracle executives highlighted that customers are showing strong demand for AMD chips, particularly in AI inferencing.
The MI450 is AMD’s first AI chip capable of scaling into a rack-sized system, allowing 72 chips to work together as one, making it suitable for training and deploying advanced AI models.
Earlier this year, AMD CEO Lisa Su and OpenAI CEO Sam Altman jointly unveiled the chip at a company event. OpenAI has since entered into a multiyear deal requiring up to 6 gigawatts of AMD-powered compute, with an initial 1-gigawatt rollout in 2026. If successful, the agreement could give OpenAI ownership of as many as 160 million AMD shares, or about 10% of the company.
The collaboration also builds on OpenAI’s $300 billion, five-year cloud deal with Oracle, signed in September. While OpenAI has historically relied on Nvidia’s GPUs—which hold over 90% market share—the AI pioneer is diversifying by partnering with AMD and even exploring custom AI chip development with Broadcom.
At Oracle AI World, Chairman Larry Ellison is expected to outline the company’s strategy to compete with Microsoft, Amazon, and Google in the cloud AI race. Analysts say Oracle’s bold bets on AI infrastructure must now translate into enterprise value by leveraging its vast data and enterprise ecosystem.
“Oracle has already shown it is willing to go all in on AI. The challenge ahead is proving it can transform raw capacity into real enterprise value,” said Daniel Newman, CEO of The Futurum Group, during the conference.
