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

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

#291

Post by chasd00 »

CyanLite2 wrote: post #124
N70Phone wrote: post #89

Earlier quoted context omitted.

> I also don't get why there commiting so much to the future, are they sure of the quality of the products and their demand that much? It's one big game of musical chairs, and everyone can hear the phonograph slowing down. OpenAI is making these desperation plays because they've ran out of hype. GPT-5 "bombed", the wider public doesn't believe AI is going to keep getting exponentially better anymore. They're out of o…

On the flip side of it (and where most institutional investors are mentally) is that if OpenAI is to ever achieve AGI, it must invest nearly a trillion dollars towards that effort. We all know LLMs have their limitations, but next phase of AI growth is going to come from OpenAI, Anthropic, Google, maybe even Microsoft, and not some stealth startup. E.g., Only Big Tech can get us to AGI due to sheer massive amounts of…

no amount of investment is going to make AGI just appear. It's looking more and more like current architectures are a dead end and then it's back to the AI drawing board just like the past 30 years.

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

#292

Post by RossBencina »

noir_lord wrote: post #249
ptero wrote: post #243

Earlier quoted context omitted.

AMD has great hardware, but its software still leaves a lot to be desired for AMD to be a major AI hardware player. It takes years of unwavering leadership focus and hundreds of millions (probably billions) of dollars to get the software that works well for AI users. The role the software played to get NVIDIA from a run-of-the-mill video card manufacturer to the top dog in AI hardware with 4T market cap is often unde…

> AMD has great hardware, but its software still leaves a lot to be desired for AMD to be a major AI hardware player. It takes years of unwavering leadership focus and hundreds of millions (probably billions) of dollars to get the software that works well for AI users. It does but they have a capable CEO with a vision and broad support from the board - Ryzen was a decade long over night success.

Zen is a success. But Zen is hardware, and AMD is (historically) a hardware company. Delivering software is hard, even if you're a software company. I wouldn't take it as given that a good (hardware) CEO, vision, and board support are sufficient to build the required software organisation, especially given their track record on this front to date. It is more likely that Modular is AMD's software savior. I won't speculate on how probable that is.

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

#293

Post by Argonaut998 »

When I was around 10 years old I remember us asking the teacher why not just print money to solve the worlds problems and the teacher scoffing. It took me another 15 years to realise that’s basically what central banks do, especially these last five years. BTC is at $125k, gold at $4000, and every other week we are inundated with some multi-hundred billion dollar deals somewhere or other. All this talk about multi GW data centers where one will notice the consumer is no where to be found, just like an extension lead plugged into itself.

Are we supposed to pretend that this is normal? Does anyone not feel like this push for AI is a last ditch effort to save the global stock market, that it MUST work out?

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

#294

Post by chasd00 »

jerf wrote: post #177
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.

You have put your finger on the AI bubble's biggest problem right now. Companies are making promises that they are currently completely incapable of fulfilling, in the hopes that someday they can, and the stock market are valuating these promises as done deals. Predicting the end of bubbles is well known to be a fool's errand, but if this AI bubble is still going in a year I can only imagine how casually these compan…

> Companies are making promises that they are currently completely incapable of fulfilling, in the hopes that someday they can, and the stock market are valuating these promises as done deals.

That reminds me a lot of Enron. As long as the stock keeps going up everything is fine but when it does t everything comes crashing down.

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

#295

Post by diamond559 »

razoorka wrote: post #225
bwfan123 wrote: post #202

Earlier quoted context omitted.

What surprises me is the pace and size of these announcements. So many announcements so fast and each one at least 100B all involving openai. Reminds me of a quote by Chuck Prince - Citigroup CEO from 2008 - "As long as the music is playing, you've got to get up and dance"

Pretty much. Strip away the AI narrative and there’s not much else driving growth right now - manufacturing’s flat, consumer spending’s slowing, and traditional tech margins are shrinking. This artificial boom in “AI infrastructure” is basically the last engine keeping the charts pointing up. When that music stops, there’s nothing underneath it but leverage and power bills.

[dead]

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

#296

Post by didibus »

DebtDeflation wrote: post #153
didibus wrote: post #146

Earlier quoted context omitted.

I can't figure who is actually investing in who? OpenAI may own 10% of AMD, and that seems like OpenAI investing in AMD in exchange for buying 6GW of GPUs and 160million in stock.

OpenAI isn't giving AMD money to get AMD stock. AMD is giving OpenAI its stock (in the form of a call option with a $0.01 strike).

I understood it as, OpenAI is giving AMD money, by buying 6GW of GPUs from them.

But if it results in their stock reaching 600$, then AMD will give back the money that OpenAI spent on GPUs as 10% stock options into AMD.

Which sounds like, no one is really investing in each other, they're both like exchanging money back and forth, where both hope to gain some extra money by propping up the AMD stock with the announcement, hoping it helps make AMD more competitive on the GPU landscape.

Did I get it right?

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

#297

Post by joenot443 »

coliveira wrote: post #288
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.

Fully anecdotal, but nearly every knowledge worker I know has Copilot or ChatGPT or some kind of corporate LLM subscription included in their job now. I don’t think the majority use it very well, but I know at least a handful who do.

Corporate America seems ready to spend real money on AI, at least for now. This money being spent today doesn’t come close to recouping the investment OpenAI et al have made, but the trickle’s begun. The money’s not all imaginary.

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

#298

Post by semiquaver »

Highly relevant money stuff from today: https://www.bloomberg.com/opinion/newsletters/2025-10-06/ope...

In a very real sense, OpenAI caused a 25% increase in AMD’s value by announcing the deal, and was allowed to capture about half of that out-of-nowhere value for itself by these options.

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

#299

Post by didibus »

lucianbr wrote: post #163
delusional wrote: post #149

Earlier quoted context omitted.

> What is AMD getting that's worth giving OpenAI $100B? The other $300B

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.

I think the idea is that, OpenAI using AMD GPUs will help AMD become competitive against Nvidia in the AI space. If OpenAI is able to use them for their models, other companies will see AMD as a legitimate option and might switch to AMD for GPUs as well.

This would be where AMD is to gain new money.

OpenAI also has to gain, if it means access to more GPUs allows it to compete and be the winner of the LLM race. As the winner of the race, it would make new money, but also likely need to spend even more money on AMD to buy even more GPUs for years to come.

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

#300

Post by threecheese »

joenot443 wrote: post #297
coliveira wrote: post #288

Earlier quoted context omitted.

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.

Fully anecdotal, but nearly every knowledge worker I know has Copilot or ChatGPT or some kind of corporate LLM subscription included in their job now. I don’t think the majority use it very well, but I know at least a handful who do. Corporate America seems ready to spend real money on AI, at least for now. This money being spent today doesn’t come close to recouping the investment OpenAI et al have made, but the tri…

I was told that - with the full complement of good tools for a scrum team- the cost approaches a 6th member of the team. The crap from MS/GH plus a decent agent like Claude/Bedrock. You can squeeze decent behavior from vscode agent if you know what you are doing, but anyone who knows what they are doing wishes they had something better.
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