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

281–290 of 390 posts

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

#281

Post by wmf »

lumost wrote: post #274
fancyfredbot wrote: post #260

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…

This depends significantly on the real cost of the gpu. The cost of enterprise ai GPUs is likely 2 orders of magnitude lower than the current list price. These deals avoid the need to markdown the price of the hardware to gain volume. If I understand the math correctly. Amd could offer the GPUs at around a 20x discount to OpenAI on a deal worth 10-20 billion and be profitable on both amortized R&D and Cost of Goods s…

It's probably closer to 5x (80% gross margin) than 20x.

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

#282

Post by wmf »

fancyfredbot wrote: post #260

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…

if OpenAI don't find a profitable use for them then both their stock price, and AMD's will go down.

Nah, nothing in the current market is based on fundamentals.

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

#283

Post by blitzar »

wmf wrote: post #282
fancyfredbot wrote: post #260

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…

if OpenAI don't find a profitable use for them then both their stock price, and AMD's will go down. Nah, nothing in the current market is based on fundamentals.

> stock price, and AMD's will go down

stonks goes up

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

#284

Post by jakogut »

alwahi wrote: post #164
dbbr wrote: post #136

Earlier quoted context omitted.

My uneducated one word answer: CUDA.

if your castle had a moat like CUDA....

How's Microsoft's Direct3D moat working out for them now? It's turned out to have been much less of a moat than it once was. Triple-A titles that are developed for Windows using Direct3D 12 are getting support on Linux through Proton within days of release, or even at launch sometimes.

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

#285

Post by Keyframe »

kalap_ur wrote: post #216
Aurornis wrote: post #165

Earlier quoted context omitted.

> The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI. There's no giving away of anything in the deal. The $0.01 per share price is only available if they purchase the GPUs. It's more like one of those "free with purchase" deals where you're still paying for the product, but they throw in something to sweeten the deal. They're not actually getting AMD shares at $0.01 e…

They sign the purchase order on 1/1/26. AMD issues invoice to be paid in 30 days, that is 2/1/26. OpenAI triggers warrant and informs AMD on 1/2/26. OpenAI receives shares on 1/4/26. On 1/5/26 OpenAI and AMD announce the GPU purchase deal. On 1/30/26 OpenAI sells its shares in AMD. From proceeds, OpenAI pays AMD on 2/1/26. Thus, AMD financed OpenAI's GPU purchase via AMD's shares.

translated, AMD buys GPU from itself and gives them to OpenAI for free. OpenAI gets GPUs for free, AMD hopes the market will reward the deal enough to increase its valuation by more than the dilution cost.

I have to ask - is this even legal? I understand it can be, but somehow it feels wrong. I guess AMD would report revenue of those GPU sale and equity issuance / dilution as part of payment terms, and OpenAI would record hardware purchase expense as well as investment income or maybe capital gain when selling those shares. What makes it legal is probably it all needs to be transparently communicated in time?

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

#286

Post by delusional »

lucianbr wrote: post #251
delusional wrote: post #247

Earlier quoted context omitted.

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…

> but that AMD has a theory but keeps it secret yet it gets the result of stock rise... is fishy.

It's not secret at all. Companies announcing a deal like this usually include some PR material alongside it [1]. In this one, the quote is:

    “Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” said Jean Hu, EVP, CFO and treasurer, AMD. “This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD's non-GAAP earnings-per-share.”
"significant strategic alignment", "shareholder value", and "billions of dollars in revenue" are all things that should be expected to move the market cap. The "tens of billions in revenue" would generate upwards of 100 billion in market cap alone, assuming AMD's current multiple.

[1]: https://www.amd.com/en/newsroom/press-releases/2025-10-6-amd...

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

#287

Post by coliveira »

nerdix wrote: post #10

The title didn't make this obvious (at least not to me) but it's OpenAI that has the option to buy 10% of AMD. Not the other way around. In case you're wondering how OpenAI could afford to buy 10% of AMD while they are hemorrhaging money -- the terms of the deal allows OpenAI to buy 160 million shares at 1 cents a share. I could be thinking about this the wrong way but it appears that AMD is basically subsidizing the…

This is money from nothing, right? They just found the tree of money.

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

#288

Post by coliveira »

fancyfredbot wrote: post #260

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…

It seems that these American companies have decided, with the government blessing, to form a cartel to split the imaginary money they assume will exist for AI technologies. This is an extremely disturbing notion that will only increase the combined power of these tech companies over our daily lives, but may also spell the doom of the economy in a not-so-distant future.

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

#289

Post by jakewins »

CyanLite2 wrote: post #244
jakewins wrote: post #135

Earlier quoted context omitted.

That “only big tech can solve AGI” bit doesn’t make sense to me - the scale argument was made back when people thought just more scale and more training was gonna keep yielding results. Now it seems clear that what’s missing is another architectural leap like transformers, likely many different ones. That could come from almost anywhere? Or what makes this something where big tech is the only potential source of inno…

The barrier of entry is too high for traditional SV startups or a group of folks with a good research idea like transformers. You now need hundreds of billions if not trillions to get access to compute. OpenAI themselves have cornered 40% of global output of DRAM modules. This isn't like 2012, where you could walk into your local BestBuy, get a laptop, open an AWS account, and start a SaaS over the weekend. Even the…

Sorry I still don’t understand.

Are you saying you disagree that a new architectural leap is needed and just more compute for training is enough? Or are you saying a new architectural leap is needed and that or those new architectures will only be possible to train with insane amounts of compute?

If the latter I dont understand how you could know that about an innovation that’s not yet been made

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

#290

Post by ctas »

buyucu wrote: post #214
amacbride wrote: post #184

I do hope that this leads to improvement in the HIP/ROCm software ecosystem. It’s definitely lacking in stability and polish compared to what NVIDIA has built. (Ask me why I’m on my third rebuild of LAMMPS this morning…)

HIP/ROCm is waaay better than it was a few years ago. It took a very long time, but AMD finally learned the importance of software.

Are consumer cards also benefiting from the improvements or only datacenters?
Post reply on HN