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

reuters.com

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

#31

Post by thejohnconway »

andrewstuart wrote: post #17

It’s quite a good strategy to counteract the prevailing sense that “No one ever got fired for buying Nvidia GPUs”. AMD just doesn’t know how to compete with Nvidia. The best it can do is charge 10% less and release GPUs about the same level of underwhelming performance as Nvidia. Maybe they wouldn’t need to sell equity if they made better faster cheaper products than Nvidia. But Lisa Su can’t bring herself to compete…

> But Lisa Su can’t bring herself to compete. Which is very strange because she brutally competed with and destroyed Intel.

Maybe making cutting-edge GPUs is actually quite an engineering challenge, and not entirely down to the competitive will of the CEO?

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

#33

Post by randomname4325 »

jeswin wrote: post #19
randomname4325 wrote: post #6

The bubble pops when Apple releases an iPhone that runs a good enough for most things LLM locally. At that point cloud hardware investments will plateau (unless some new GPU melting use case comes out). Investors will move from nvidia, AMD into Apple.

As a local LLM enthusiast, I can tell you that it's useless for most real work - even on desktop form factors. Phones catching up is ever farther out.

Based on the recently released graph of how people are using chatgpt. ~80% of use cases (practical guidance, seeking information, writing) could presumably run on a local model.

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

#34

Post by theli0nheart »

john-h-k wrote: post #22
theli0nheart wrote: post #8

> As part of the arrangement, AMD issued a warrant that gives OpenAI the ability to buy up to 160 million shares of AMD for 1 cent each over the course of the chips deal. The warrant vests in tranches based on milestones that the two companies have agreed on. This is money printing, just in the private sector. We know what happens when governments do it, and it's not good.

It’s quite specifically not money printing, because it’s backed by something. It could be bad sure but it’s not money printing

Backed by what?

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

#35

Post by [deleted] »

john-h-k wrote: post #22
theli0nheart wrote: post #8

> As part of the arrangement, AMD issued a warrant that gives OpenAI the ability to buy up to 160 million shares of AMD for 1 cent each over the course of the chips deal. The warrant vests in tranches based on milestones that the two companies have agreed on. This is money printing, just in the private sector. We know what happens when governments do it, and it's not good.

It’s quite specifically not money printing, because it’s backed by something. It could be bad sure but it’s not money printing

[deleted]

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

#36

Post by giancarlostoro »

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…

Similar to how Microsoft bought out nearly half of OpenAI, though they offered compute credits IIRC. I wonder how much into Microsoft's investment OpenAI is in.

Edit: Apparently what Microsoft owns is 49% profit-sharing interest in OpenAI, specifically in the 'capped profit' for profit subsidiary. So weird, but hey, it's still a slice of the pie. Plus they can exclusively sell access to the models.

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

#37

Post by simianwords »

randomname4325 wrote: post #6

The bubble pops when Apple releases an iPhone that runs a good enough for most things LLM locally. At that point cloud hardware investments will plateau (unless some new GPU melting use case comes out). Investors will move from nvidia, AMD into Apple.

why do you think LLM's will get good enough that they can run locally but the ones requiring nvidia GPU's will not get better?

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

#38

Post by fkyoureadthedoc »

ptsneves wrote: post #26
krige wrote: post #13

Earlier quoted context omitted.

Cloud gaming sucks due to latency, not price.

Played forza motorsport 5 on xbox cloud gaming and could not notice it. Of course I am the most non-serious player ever, but I really tried to notice, and for my standards it was fine.

maybe I'm just over sensitive to it, but I can't even stand playing when the tv isn't on game mode. can't imagine waiting for controller input to make a server roundtrip

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

#39

Post by yousif_123123 »

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…

I think at least part of the 10% is if AMD stock reaches 600.

Not that I disagree that this looks weird. Why was that needed to be offered? Couldn't they just buy the AMD chips if they're good enough? Or Nvidia is it's better?

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?

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

#40

Post by randomname4325 »

aswegs8 wrote: post #11
randomname4325 wrote: post #6

The bubble pops when Apple releases an iPhone that runs a good enough for most things LLM locally. At that point cloud hardware investments will plateau (unless some new GPU melting use case comes out). Investors will move from nvidia, AMD into Apple.

What's the advantage of that, exactly? Why would you want something very compute intensive run on your phone instead of just using an API to data centers with great economy of scale?

My assumption is that most users won't actually care if the LLM is in the cloud or device. That said, quite a few folks have iPhones and Apple's only way into the AI race is to go to it's strength, 1B+ hardware devices that they design the silicon for. They will produce a phone that runs a local LLM and market it as private and secure. People upgrade every couple of years (lose or breaks) so this will drive adoption. I'm not saying people will vibe code on their iphones.
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