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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

#41

Post by thiago_fm »

When the bubble pops, the US' FTC will need to place limits on those circular deals like this.

Literally the whole big tech will melt. There are banks that are backing up certain GPU deals and those will be hit with billion losses as well.

Imagine once they have to depreciate those $1T+ of GPUs, data centers and the like that can't even be on resale for gaming.

Imagine when economic blocks like the EU and BRICs starts to reject more US software, when so much of those Big Tech revenues are made abroad. The recent geopolitics plays being a key factor.

This looks really bad.

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

#42

Post by kaptainscarlet »

theli0nheart wrote: post #34
john-h-k wrote: post #22

Earlier quoted context omitted.

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?

Compute resources.

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

#44

Post by TiredOfLife »

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.

The new iPhones barely got 12gb of ram. The way Apple is going iPhones will have enough ram for llms in about 100 years

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

#45

Post by diego_sandoval »

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.

I'm very ignorant, will AMD shares get diluted? or how is it money printing?

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

#46

Post by admaiora »

krige wrote: post #13
grim_io wrote: post #7

Earlier quoted context omitted.

Cheap cloud gaming. Those GPU's will finally push pixels again :)

Cloud gaming sucks due to latency, not price.

Not even an issue anymore. I have no issue playing FPS games like call of duty multiplayer via GeForce Now and can be decently competitive. I do live close to the servers though.

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

#47

Post by archerx »

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…

>AMD just doesn’t know how to compete with Nvidia.

They know exactly how to compete with Nvidia but choose not too.

>But Lisa Su can’t bring herself to compete.

Because she is colluding with her cousin Jensen.

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

#48

Post by andrewstuart »

findthewords wrote: post #29
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…

I think it's quite obvious why Lisa Su isn't motivated to financially crush her first cousin once removed. AMD is doing quite well in the CPU space and as such isn't even forced to compete in the GPU space. AMD could take market share from Nvidia, but they don't have to, because there is no one else who would take it either.

So the “we’re so successful, we don’t need any more business, so we’re just cruising”, strategy eh?

Doesn’t resonate for me as how most American companies do business.

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

#50

Post by bee_rider »

alberth wrote: post #9
didntknowyou wrote: post #4

they're just printing money for each other at this point

Some refer to it as "circular financing". It's "seller financing" but to a degree we've never seen before in an industry (which create these "circular" effects). There's a good HN thread from 2-days ago on this subject (200+ comments). https://news.ycombinator.com/item?id=45473033

What a mess. When they have to write about how “circular financing” became highly regulated in the future, I hope they know that the problem was not confusing in the big picture.

Maybe I can get quoted in a sidebar:

“Hey Econ students, we normal people could see that the AI market was extremely gamed. We can see the investment feedback loop. It is just that the organizations continuing it have control over so much money, they don’t have to stop and ask society in general for permission to continue. Really this is a symptom of the wealth inequality crisis that they covered chapter…”

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