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All I want to know is, should we be investing into these companies as a result of these deals? Or should we be moving out of these positions.
The OpenAI/AMD deal has an explicit AMD price target of $600. I don't see how it can be any clearer.
Every day a new deal involving OpenAI. Every day one or more article wondering if/when the AI boom will transform into a bursting bubble. Maybe people are crying wolf or misreading the situation. My gut feeling is that yes, this is indeed a bubble and behind closed doors the CEOs are in panic mode, weirdly repeating past and well known mistakes
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Yes but this is by design. Wealthy people want bubbles, when they pop, you can gobble up all the value at all time lows. Then you hold until you don't feel like it anymore as the market goes back to growing. You see this as how private equity has bought up real estate across the USA to turn into rentals after 2008, for example.
Aren’t extremely wealthy people that wealthy due to the valuation of their stock? IIRC generally the higher the networth, the higher share is kept in stocks
There is some circular financing going on, but AI accelerationists think this will be offset by demand, value, and adoption in businesses. Hence these deals are warranted for the incoming demand.
Welcome to how economies work. You only worry when you can see where the ends of the circle meet up. Ponzi schemes are notable specifically due primarily to the fact that they’re so directional and one-way.
Welcome to how economies work. You only worry when you can’t see where the ends of the circle meet up. Ponzi schemes are notable specifically due primarily to the fact that they’re so directional and one-way. If you can’t pinpoint the escapement and see how it’s feeding into the winding of some other spring, walk away.
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This is how financing works. When you buy a house, you get a mortgage from a bank. It is unusual to get a mortgage from a seller. It would feel a bit circular, right? But that is exactly what happens most of the time when people buy a car. They get a loan from the same company that sells them the car. Is that circular? When you replace people with companies, the financing can become much more complex. The example you…
When people buy a car they sometimes get a loan from the auto manufacturer’s financial services arm. What they don’t usually get are warrants struck at a penny for 10% of the manufacturer. You sound like you know what you’re talking about. I only think I know what I’m talking about. Help me understand: What am I missing in the OpenAI / AMD deal that makes it non circular?
AMD: We need cash too, you know? We'd love to sell you those thousands and thousands of high end GPUs, that would cover some of our R&D, and we could one day match NVidia. But we don't swim in cash either. We can't give you the discount.
OpenAI: What can you give us? You must be able to throw in something there. Otherwise, honestly, we can't make the deal.
AMD: What if we give you some equity? And if our deal goes well, and our GPUs start being viable alternatives to Nvidia's, maybe we'll be able to get close to Nvidia's market cap and even surpass them, just like we did with Intel.
OpenAI: Brilliant. We love it.
AMD: Yes, but that equity will be contingent on how the deal goes.
OpenAI: Sure thing, we'll take that.
clearly openAI is the top dog here who can hoover all the money , but it's not a public company
So far OpenAI hoovered - (minus) $7 Billion in first quarter 2025. $11.2 billion OPEX (compute, sales/marketing) in exchange for $4.3bn revenue. I wonder if revenue sharing agreement with Microsoft means Microsoft gets to pay for half of that :-)
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> Can you get that without adding a payment mechanism? No! There are actually two free tiers. The limited free tier you get without adding a CC and then this advanced "always free" tier I am using, where you have to use and verify a CC and have to pay big bucks if you mess up. limited free tier: 300$ to be spent in 30 days advanced always free tier: https://docs.oracle.com/en-us/iaas/Content/FreeTier/freetier...
So it's free... Until is not. My take on this would be that if Oracle makes any change to that "free" tier and you do not take proper action you might be automatically charged hefty amounts from your credit card. No, thanks. It's way way safer to spend few bucks a month in other VPS options than get a big surprise on your credit card.
The big limitation is the 10mbit egress bandwidth, but you can work around that with (free) Cloudflare.
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This is How Larry Elisson beat Musk for a short while although Oracle was struggling.' The deals among Oracle, Nvidia, and OpenAI have raised concerns about their circular and potentially risky nature. Oracle is reportedly spending tens of billions on Nvidia's advanced chips, Nvidia plans to invest up to $100 billion in OpenAI, and OpenAI uses Oracle's cloud infrastructure through Microsoft's Azure, creating a closed…
It's worth noting Elisson is 2 years older than Trump. What's he going to do with all that money, and what does he care for the risk it's bad or shady? Worst case, he got to be #1 for a bit for a few dozen billion, best case he's hoping AGI will extend his life before he croaks.