Advanced Micro Devices (AMD) recorded a $1.097 billion non-cash accounting charge in the third quarter of 2026 related to stock warrants issued under its artificial intelligence chip agreements with OpenAI and Meta. AMD disclosed the amount alongside its November 3 earnings report for the quarter ended September 26, 2026. The charge reflects how these stock warrants were valued for accounting purposes and does not mean AMD paid $1.097 billion in cash.
The charge is connected to stock warrants granted to OpenAI and Meta as part of long-term AI chip supply agreements. A stock warrant gives its holder the right to buy company shares at a specified price if certain conditions are met. Under AMD’s agreements, the rights become available in stages as customers meet chip-purchase milestones and other requirements. The arrangement connects the customers’ potential ownership in AMD with the progress of their AI hardware purchases.
AMD announced a six-gigawatt GPU partnership with OpenAI in October 2025 and a separate six-gigawatt AI chip partnership with Meta in February 2026. Each agreement includes an initial binding purchase commitment covering one gigawatt of AMD Instinct GPUs, with broader deployments planned in stages. The companies have not publicly disclosed a fixed $60 billion purchase commitment under Meta’s announced agreement. Meta’s broader AI hardware strategy also includes working with outside suppliers, as covered in TechBonafide’s report on Meta’s AI training chip strategy.
Both OpenAI and Meta received warrants to purchase up to 160 million AMD shares each at an exercise price of $0.01 per share. However, the shares are not automatically issued or immediately available for purchase. According to AMD’s warrant disclosures, the rights vest in stages based on GPU purchase milestones and specified AMD stock-price conditions. OpenAI’s warrant also includes separate stock-performance requirements. Additional technical and commercial conditions must be satisfied before the companies can exercise their rights.
AMD’s third-quarter earnings release lists a $1.097 billion change in the fair value of its customer warrant liability, equivalent to about $0.66 per diluted share in the company’s earnings reconciliation. This non-cash charge reflects a quarterly revaluation influenced by changes in AMD’s stock price and other valuation assumptions. It does not represent a direct cash payment to OpenAI or Meta. AMD excludes this warrant revaluation when calculating its adjusted, or non-GAAP, earnings.
AMD’s overall business continued to grow despite the accounting charge. Revenue for the third quarter of 2026 reached $13.377 billion, an increase of 45% from the same period a year earlier. Its Data Center segment generated $8.546 billion in revenue, up 97% year over year. AMD attributed the strong data center performance to demand for its EPYC server processors and the launch of its Instinct MI450 series AI GPUs.
AMD reported net income of $2.428 billion under generally accepted accounting principles (GAAP), equivalent to $1.46 per diluted share. On an adjusted, or non-GAAP, basis, earnings reached $2.09 per diluted share. The adjusted results exclude specified accounting items, including the customer warrant revaluation, and provide another way to assess the company’s operating performance. Both measures are important because they account for certain expenses and adjustments differently.
AMD shares rose by around 8% in after-hours trading shortly after the company released its November 3, 2026 earnings results. The initial rise suggested that investors were encouraged by stronger AI hardware demand and AMD’s revenue outlook, although after-hours share prices can change quickly.
The agreements also create a potential risk for existing AMD shareholders. If all required conditions are met and both companies exercise their warrants in full, AMD could issue up to 320 million additional shares in total. This would increase the number of AMD shares outstanding and reduce existing shareholders’ percentage ownership, a process known as share dilution. However, the potential issuance remains conditional and does not mean all these shares have already been issued.
During AMD’s November 3 earnings call, Chief Financial Officer Jean Hu explained that shares associated with the customer warrants would affect AMD’s diluted share count only after the relevant vesting and exercise conditions were satisfied. She also said AMD planned to provide more detailed guidance in 2027 about when those conditions might be met.
The partnerships are particularly important because AMD is competing with Nvidia, a leading supplier of processors used to train and run advanced AI models. Competition is increasing as cloud providers and AI developers seek greater computing capacity and additional sources of powerful GPUs. TechBonafide previously examined Nvidia’s proposed investment in OpenAI and its AI infrastructure plans, highlighting how closely AI chip supply and major technology partnerships are connected.
AMD is responding to rising demand by expanding its Instinct AI accelerators, EPYC server processors, and Helios rack-scale computing systems. One example of commercial demand is HPE’s $1.2 billion AMD Helios order from Vultr, which involves integrated AI infrastructure for cloud data centers. These systems combine powerful processors, high-speed networking, software, and cooling technologies to support demanding AI workloads, including model training and inference.
Looking ahead, AMD expects approximately $17 billion in revenue for the fourth quarter of 2026, with a possible variation of 3%. The company also forecasts an adjusted gross margin of around 55%. These figures represent AMD’s outlook rather than confirmed future results, and actual performance will depend on customer demand, product shipments, supply conditions, and other market factors.
The $1.1 billion accounting charge illustrates both the opportunities and financial challenges involved in AMD’s major AI partnerships. While the agreements could support billions of dollars in future chip sales, their long-term value will depend on customer purchases, market demand, and AMD’s ability to compete in the global AI hardware industry.
