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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

#361

Post by rhetocj23 »

baobabKoodaa wrote: post #341
Havoc wrote: post #308

Earlier quoted context omitted.

It's fundamentally a leap of faith that AI will work out. The entirety of OAI is exactly that - a triple bet the farm on AI. Whether this works out or not no longer depends on the specifics of the deals. This either works big picture or it's all a smoking crater

Sounds like you are talking about AGI or superintelligence or something? Because productive AI tools are already here and have been for a few years. AI has already "worked out". Nothing speculative about that.

Lets assume AI has worked out. Can you point me to the effect on earnings of the customers of said AI tools who have publicly disclosed the affect on earnings because of said tools?

Thanks.

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

#362

Post by MonkeyClub »

rhetocj23 wrote: post #360
osn9363739 wrote: post #350

Earlier quoted context omitted.

I have a senior that talks like this. Does everything through AI now. Barely writes anything himself. Has 5x'd his productivity. Like having his own team. Thing is his work is awful. The people who review his PRs have to spend 5x the time looking at his work. He's been pushed off to another team thank god. Not saying there aren't advantages and uses for AI. but if what you are saying were true (like having 2-3 report…

And then people turn around and hand-wave that away by saying: But youre assuming that the development of LLMs stop and they wont be able to address that problem. Like Okay, it sounds like a valid point. The issue is the hand waving and the fact it is not grounded in reality.

I took GP's comment to say that, even if LLMs get massively better in the next six months (which they will), the colleagues still have to wade through the slop during the review this week.

So while one person is getting a 5x increase in productivity, one or two get a corresponding 5x decrease.

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

#363

Post by ifwinterco »

Jlagreen wrote: post #359
SecretDreams wrote: post #142

Earlier quoted context omitted.

Totally fair. If you've got a great cost basis, you can stress less. The question then becomes what feels worse: Watching a position you sold double or watching a position you're holding get cut in half?

There is one answer to this question which is called options. Selling short term OTM CCs with half of premium being used to buy ITM Calls (1/3 protection of the CC), OTM Calls (protection against gap up) and longterm OTM Puts (earn money when Nvidia nose dives).

There is no free money from option selling, you are taking some form of directional risk whether you realise it or not

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

#364

Post by eldgfipo »

munksbeer wrote: post #268
kalap_ur wrote: post #216

Earlier quoted context omitted.

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.

The rest of the world trying to decipher this post because of the date format :headscratch:

DD/MM/YYYY please

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

#365

Post by yifanl »

specproc wrote: post #344
phkahler wrote: post #320

Earlier quoted context omitted.

>> Nah, nothing in the current market is based on fundamentals. Sure it is. Stock prices are based on supply and demand. Oh, did you mean company fundamentals? Hmm. BTW that demand is all coming from 401k contributions. The powers that be are terrified of a downturn causing too many job losses tanking the whole thing.

It's gotta happen though, right? Pretty much guaranteed. What's the event that precipitates it?

A disappointing release from NVidia would pretty much be unrecoverable I imagine.

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

#366

Post by jpadkins »

diamond559 wrote: post #321
jpadkins wrote: post #269

Earlier quoted context omitted.

specifically, it's coming from new AMD stock holders that are buying shares at much higher than current prices. And those shareholders are buying a company that they value more because AMD is better positioned in the LLM market because of the side effects of the OpenAI integration. Existing AMD shareholders are getting a great deal; their shares are worth 30% more today and will be worth 5X more if OpenAI gets to use…

They are getting a meaningless deal unless they can nearly triple their market value from here. Sam isn't buying AMD shares for more than a penny, what should we value it at?

Sam doesn't get to buy AMD shares for a penny unless it reaches a certain threshold (not sure if those details are public, but I read 3-5X last week's price in these threads). It's common in these deals to have these thresholds for options.

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

#367

Post by brandon272 »

MonkeyClub wrote: post #362
rhetocj23 wrote: post #360

Earlier quoted context omitted.

And then people turn around and hand-wave that away by saying: But youre assuming that the development of LLMs stop and they wont be able to address that problem. Like Okay, it sounds like a valid point. The issue is the hand waving and the fact it is not grounded in reality.

I took GP's comment to say that, even if LLMs get massively better in the next six months (which they will), the colleagues still have to wade through the slop during the review this week. So while one person is getting a 5x increase in productivity, one or two get a corresponding 5x decrease.

Why would we expect LLMs to get “massively better” in the next 6 months instead of the incremental improvement we have seen to date?

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

#368

Post by UncleOxidant »

cebert wrote: post #327
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.

Does anyone here who lived through the dotcom bubble feel like we're in a similar situation with AI? I am excited about AI and recognize its potential. However, the increasing number of business deals like this one is raising my concerns that we may be heading toward a harsh bubble.

Yeah, it feels like deja vu. The speed of this bubble inflating, though, is much faster. It's feeling very dangerous and the longer this goes on the more dangerous it gets. I saw something yesterday that said AI spending is propping up 40% of US GDP right now. That would mean that this bubble popping would probably have a bigger effect over a bigger part of the economy than the dotcom bust.

It feels like the dotcom bubble was recent to those of us who lived through it, but 25 years is about a generation. But a lot of the people in the markets now (and running companies) were kids back then and thus weren't really aware of what was going on.

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

#369

Post by osn9363739 »

rhetocj23 wrote: post #360
osn9363739 wrote: post #350

Earlier quoted context omitted.

I have a senior that talks like this. Does everything through AI now. Barely writes anything himself. Has 5x'd his productivity. Like having his own team. Thing is his work is awful. The people who review his PRs have to spend 5x the time looking at his work. He's been pushed off to another team thank god. Not saying there aren't advantages and uses for AI. but if what you are saying were true (like having 2-3 report…

And then people turn around and hand-wave that away by saying: But youre assuming that the development of LLMs stop and they wont be able to address that problem. Like Okay, it sounds like a valid point. The issue is the hand waving and the fact it is not grounded in reality.

The assumption that it will just keep getting better is a big one. Maybe they will. Maybe they wont. If they get better I'll stop complaining. Right now I just don't think they are at the level people claim.

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

#370

Post by layla5alive »

lumost wrote: post #279

This seems to be OpenAI's path to victory in the AI race. Buy up the supply chain of compute to the extent that no other competitor could possibly have access to the same compute. If they are able to shut out Google/X.AI from the market, there really aren't any viable firms to keep financing next generation models on a pure compute scaling basis. I'm leaving out Anthropic as they don't appear to be as compute focused…

Google builds TPUs
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