A start-up artificial intelligence company is making headlines today after announcing deals with two of the world’s largest tech companies. Anthropic is securing US$5 billion from Microsoft (NASDAQ: MSFT), while leading chipmaker Nvidia (NASDAQ: NVDA) is investing US$10 billion in the latest deals to fuel AI’s rapid expansion.

Both companies have high hopes that the deals with Anthropic, an AI research company valued at over US$180 billion, will strengthen their market-leading positions. But which stock is the better buy following these transactions?

About the deals

The partnerships among the three companies were announced in a blog post on Nov. 18. In short, Anthropic will scale up its Claude AI model on Microsoft’s cloud computing platform, Azure, and it will use Nvidia’s Blackwell and Rubin semiconductors to provide the compute power.

It’s the first partnership between Anthropic and Nvidia, the world’s leading producer of data centre graphics processing units (GPUs) required for training and running high-performance AI programs. The companies said that Nvidia and Anthropic will collaborate on design and engineering to optimize Anthropic’s AI models.

Anthropic’s deal with Microsoft will make the AI company’s Claude large language model (LLM) available to Microsoft Foundry customers, and will make Cloud the only frontier LLM available on the three leading cloud services – Microsoft Azure, Amazon (NASDAQ: AMZN) Web Services, and Alphabet‘s (NASDAQ: GOOG) Google Cloud.

Anthropic is committed to purchasing US$30 billion in Azure compute capacity and will have a contract for additional compute capacity of up to 1 gigawatt.

Which stock is better after the Anthropic deal?

While both benefit, I think there’s a clear winner here. However, first, it’s essential to examine some background information.

Microsoft was one of the early investors in OpenAI, the creator of ChatGPT, but the nature of that relationship is evolving. Last month, OpenAI announced it struck a deal with Microsoft that allows the company to restructure and frees it from giving Microsoft rights over OpenAI’s work in exchange for cloud computing services. Microsoft still has a 27% stake in OpenAI, but the private company will now have greater control over its business operations.

Anthropic was founded by a former OpenAI executive and emphasizes AI safety, transparency, and research, in contrast to OpenAI’s focus on general advancement and accessibility.

Make no mistake — OpenAI and Anthropic will be competitors for a long time. Microsoft is working with both of them and hopes both will continue to grow. However, if Anthropic begins cutting too severely into ChatGPT’s market share, Microsoft’s US$135 billion investment in OpenAI could be at risk.

Nvidia, however, has no such conflicts. OpenAI and Anthropic both rely heavily on its GPUs, and as both companies expand their products, they will need more computing power and more support from Nvidia.

I like both Microsoft and Nvidia. But if you’re picking a winner in today’s news, my money’s on Nvidia stock.

The post Nvidia and Microsoft Land a Multibillion-Dollar Anthropic Partnership. Which Stock Benefits Most? appeared first on The Motley Fool Canada.

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Fool contributor Patrick Sanders has positions in Nvidia. The Motley Fool recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

This article first appeared on The Motley Fool’s U.S. website.

Advanced Micro Devices (NASDAQ: AMD) stock was up more than 28% in trading Monday morning after the semiconductor company announced a massive deal with ChatGPT owner OpenAI. The deal calls for OpenAI to take a 10% stake in AMD, worth up to 160 million shares, and will have AMD provide around 6 gigawatts of graphics processing units (GPUs) to OpenAI.

The deal is a huge shot in the arm for AMD, which has been playing second fiddle to Nvidia in the GPU game for the last several years. While Nvidia’s stock is up over 1,300% in the last three years as it became the largest publicly traded company in the world, AMD is up a comparatively soft 200% in the same period.

AMD data by YCharts

But that may be changing. While Nvidia still rules the roost, AMD has been catching up this year. In fact, its stock performance doubled that of Nvidia’s so far in 2025. Will its deal with OpenAI help AMD continue to close the gap?

About the deal

According to AMD, the definitive agreement to power Open AI’s infrastructure will roll out over several generations of OpenAI’s infrastructure, starting with the initial 1 GW purchase of AMD Instinct MI450 GPUs to begin in the second half of 2026.

The deal calls for AMD to issue OpenAI a warrant for up to 160 million shares of AMD common stock that would vest as specific milestones are achieved. The first tranche of the warrant vests with the first 1 GW deployment and continues as OpenAI purchases more GPUs to reach 6 gigawatts.

“We are thrilled to partner with OpenAI to deliver AI compute at massive scale,” AMD CEO Lisa Su said. “This partnership brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”

AMD’s chief financial officer and executive vice president, Jean Hu, said that AMD’s relationship with OpenAI will deliver “tens of billions of dollars in revenue for AMD.”

The bottom line

The AMD-OpenAI deal is the most recent in a series of transactions made by the nation’s biggest chipmakers as companies race to scale. Nvidia recently announced a $100 billion deal with OpenAI, as well as a US$5 billion stake in Intel, which is competing with AMD in the central processing unit (CPU) space. OpenAI also has a $300 billion deal with Oracle to purchase cloud equipment.

If AMD can realize management’s prediction for tens of billions in additional revenue from its OpenAI deal, AMD stock should remain a viable alternative to Nvidia for investors who are looking to invest in AI infrastructure. And when you consider that AMD has by far outperformed Nvidia in 2025, it appears the stock will continue to have a significant runway for growth.

The post As OpenAI Diversifies Beyond Nvidia, AMD Stock May Have Just Gained a Massive Catalyst appeared first on The Motley Fool Canada.

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Fool contributor Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool recommends Advanced Micro Devices. The Motley Fool has a disclosure policy.