Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

reuters.com

Post reply on HN
Print view View original

251–260 of 390 posts

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#251

Post by lucianbr »

delusional wrote: post #247
lucianbr wrote: post #163

Earlier quoted context omitted.

Where is this other $300B coming from? Is OpenAI paying AMD $400B or what? I looked at the article but it seems disjointed and hard to parse for me. And I don't see where it mentions some $400B coming to AMD one way or another. It's implied... how? Sorry, this isn't sarcasm or anything like it. I just don't get it and your answer does not help.

The traditional "efficient market" theory would be: synergies. The market believes that AMDs value increased BECUASE OpenAI now owns it. That is to say, the market believes that OpenAI taking a stake in AMD increases the value of AMD. There are a host of different hypothesis you could pose to explain that. Maybe OpenAI has some secret sauce they'll share with AMD now that they have a stake. Maybe OpenAI will be more…

Thanks for explaining.

Imho AMD itself needs to have a theory, which underpins their signing of the deal. For my clueless self, that investors have various theories and we don't know what they are is ok-ish, but that AMD has a theory but keeps it secret yet it gets the result of stock rise... is fishy.

Everyone is going in circles making suppositions and estimations based on who knows what. That can't be healty, can it? There used to be requirements that publicly listed companies act with some level of transparency, and those requirements existed for a reason. I guess. I am certainly no expert in finance.

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#252

Post by SecretDreams »

nextworddev wrote: post #231
alwahi wrote: post #166

Earlier quoted context omitted.

i grew up thinking finance was boring. after 2008, i started to pay a bit of attention, but the last few years of financial shenanigans have been absolute cinema, it feels like we are approaching the season finale.

Just enjoy it if you can’t avoid it

That's how those Titanic violinists probably felt!

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#254

Post by blihp »

SirMaster wrote: post #132
alberth wrote: post #126

Earlier quoted context omitted.

> allows OpenAI to buy 160 million shares at 1 cents a share. > I think at least part of the 10% is if AMD stock reaches 600. AMD market cap today is $350B (at $200/share). AMD would need to 3x their market cap ($1,000B) to be at $600/share. Which would mean that OpenAI could gain $100B in AMD stock, for the minuscule cost of only $1.6 million (160 million shares at 1 cent each). -- Sam is spinning the world on his f…

Is there any real reason AMDs market cap can't be close to what Nvidia's is? Or like even half of what Nvidia's is?

Try to use AMD GPU's for AI and you'll understand. Unless you have lots of your own engineers to throw at making their stuff work, it's easier for most companies just to keep throwing money nVidia's way.

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#256

Post by zerosizedweasle »

SecretDreams wrote: post #105
Jlagreen wrote: post #85

Earlier quoted context omitted.

And you have that right. And now imagine what will happen when OpenAI makes deals with Nvidia and AMD. Do you think Hyperscalers will just watch? I expect Musk to make a $1 trillion deal soon. I guess, that's why he wants to get the $1 trillion from Tesla. And do you think Meta, Amazon, Microsoft and Google will stand by while Altman and Musk are buying future supply from Nvidia and AMD? I love that. As an investor i…

Trading any of this, the only question that you need to answer is: What is more painful to you, missing some gains on the way up or holding positions that have flipped from positive to negative very rapidly? Markets like this, the moves will be violent in both directions, not just on the way up.

This is all assuming that the government will be able to bail them out of trouble. But the bond market / interests rates / inflation and government debt mean they could so serious damage to the country if they tried.

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#257

Post by gowld »

AMD gives OpenAI $30B worth (todaty's value) of AMD stock.

Cash-poor OpenAI pledges/promises about ~$100B in purchases.

AMD makes back the money on (a) 30% volume discount is normal? (b) stock pop from AI hype (AMD popped up ~$100B market cap on the news.) ?

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#258

Post by gowld »

lesuorac wrote: post #209
wmf wrote: post #178

Earlier quoted context omitted.

When the stock goes from $150 to $600 that's not called dilution. Nobody cares about the number of shares in that situation.

The CEO of Tesla, Elon Musk, was sued over an extremely similar situation. So somebody will care. That said, this is really about the principal. Sure, if I give you $10 and you give me a hamburger it's not like some illegal transaction. But to say the $10 comes from thin air is wrong. It doesn't come from thin air. I would bet that if one day OpenAI decided to sell 10% of AMD the stock would crash from $600 to below…

What Musk suit are you talking about?

The rest of your comment doesn't make sense.

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#259

Post by ralfn »

j4hdufd8 wrote: post #159
wqaatwt wrote: post #123

Earlier quoted context omitted.

> that the software is the moat, not the hardware design. For inference that’s hardly relevant, though? For training its not exactly insurmountable either.

GPUs are also used to speed up inference (the math is virtually the same). You think your ChatGPT queries are running on x86 servers?

But do you think with the profit margins of NVidia, others won't be offering competing chips? Google already has their own for example.

From that perspective the notion that NVidia will own this AI future while others such as AMD and Intel standby, would be silly.

Im already surprised it took this long. The NVidia moat might he software, but not anything that warrants these kind of margins at this scale. It is likely there will be strong price competition on hardware for inference.

Re: AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake

#260

Post by fancyfredbot »

This $100bn deal didn't cost anything and isn't worth anything. Remember back two weeks ago when Nvidia gave OpenAI $100bn so they can keep buying Nvidia GPUs? This is AMD trying to do the same, but they don't have $100bn so they are offering OpenAI share options to buy GPUs.

The share options will be worth at least $100bn too, if the conditions are met. But meeting the conditions will require buying huge numbers of GPUs from AMD. GPUs worth $100bn, and somewhere to put them. OpenAI can't afford that - not even close.

So they need to raise financing. On the face of it, the options seem to mean that lending OpenAI the money to buy the GPUs is perfectly safe. You take the stock options as collateral. You lend the money, OpenAI buy the GPUs, the AMD stock goes up, the option conditions are met, and even if OpenAI didn't pay you back the options will let you recover your investment.

However, this loan is far less safe than it first appears. The problem is that although lending the money allows openAI to buy GPUs, this doesn't necessarily cause AMD stock to rise. Infact if OpenAI don't find a profitable use for them then both their stock price, and AMD's will go down. And you'll be left with worthless collateral and a big loan to a company which can't afford to pay it back. So they haven't actually magically created financing at all. They just created the illusion of it. It's very clever. But it's fake. The real announcement will be when or if someone lends OpenAI cash.

Post reply on HN