TLDR
- Rackspace Technology (RXT) stock surged 21% to $7.15 in premarket trading Tuesday after finalizing a deal with AMD
- The agreement makes AMD the primary chip supplier for Rackspace’s AI cloud infrastructure
- The two companies will deploy an initial 30 megawatts of AMD-based computing capacity across Rackspace’s global data centers
- Rollout begins in late 2026, with full deployment expected by 2028
- The partnership targets regulated industries like healthcare, focusing on governed enterprise AI infrastructure
Rackspace Technology (RXT) stock jumped 21% to $7.15 in premarket trading on Tuesday after the company finalized a deal with Advanced Micro Devices (AMD) to use AMD chips across its data center network.
Rackspace Technology, Inc., RXT
AMD stock was also up, rising 0.9% on the news, outpacing Nasdaq futures which gained 0.3%.
The deal converts a memorandum of understanding signed in May into a full definitive agreement. It formally establishes AMD as the strategic chip partner at the core of Rackspace’s AI infrastructure stack.
The two companies plan to deploy 30 megawatts of AMD-based computing capacity across Rackspace’s global data centers. The rollout starts in late 2026 and is expected to reach full deployment by 2028.
The partnership will use AMD Instinct GPUs, including the MI355X and MI350P models, as well as AMD EPYC CPUs. These will be integrated into what the companies are calling an “Enterprise AI Cloud” architecture.
Rackspace CEO Gajen Kandiah said the collaboration delivers a “governed AI stack with one accountable partner from silicon to outcomes.” The pitch is aimed squarely at enterprises in regulated sectors that need tighter control over their AI infrastructure.
Healthcare is one of the early target markets. Rackspace said healthcare providers have already expressed interest in using the platform for clinical AI and inference workloads.
What the Deal Actually Covers
The agreement includes four product areas: Enterprise AI Cloud, Enterprise Inference Engine, Inference as a Service, and Bare Metal AMD Instinct. Together, they are meant to offer a complete managed stack from raw compute through fully operated AI inference.
Both AMD and Rackspace said they will dedicate sales and marketing staff to jointly pursue customers. The focus is on regulated industries where data governance and accountability are a priority.
The companies say the shift from AI experiments to agentic workflows running inside core enterprise systems is driving demand for this type of infrastructure.
Why Regulated Industries Matter Here
Most AI infrastructure today is built around bare metal models, where enterprises piece together their own stack from multiple vendors. Rackspace and AMD are positioning this deal as an alternative, with a single operator accountable for the full setup.
Dan McNamara, SVP of Compute and Enterprise AI at AMD, said the deal gives regulated enterprises access to “high-performance AI infrastructure with the openness, scalability and accountability needed to run AI at enterprise scale.”
Rackspace’s stock has had a volatile year, and Tuesday’s premarket move reflects how the market is responding to the company locking in a long-term hardware commitment with one of the chip industry’s biggest names.
The 30 MW initial footprint is set to begin rolling out in late 2026.
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