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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

#61

Post by tesdinger »

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 not money printing because shares are not classified as money in economics. Money is used for transactions while shares primary purpose is not transactions.

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

#62

Post by thiago_fm »

palmotea wrote: post #15
grim_io wrote: post #7

Earlier quoted context omitted.

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

> Cheap cloud gaming. > Those GPU's will finally push pixels again :) Have they ever? I wonder if, say, an H100 even supports graphics APIs.

H100s have certain tradeoffs that makes gaming not as energy efficient.

Funnily enough, H100s are already old hardware, and soon will all get fully depreciated.

Billions and billions of depreciated assets!

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

#63

Post by alexeldeib »

giancarlostoro wrote: post #57
cs702 wrote: post #55

OpenAI now has an option to buy 10% of AMD for $0.01 per share, subject to certain milestones. Basically, AMD is giving up equity to buy its way into the AI market. It's fantastic news , because OpenAI and AMD will now work together to develop decent software libraries for AI on AMD chips. We all want an alternative to Nvidia and cuda. This partnership could deliver it in the not too distant future.

My understanding from the more hardware savvy friends I have is that AMD is better for inference (so when you run a model) vs for training Nvidia is still king. Would be interesting if OpenAI does in fact take AMD's offer and how they use it (if they even share openly).

Larger memory, weaker comms. You can optimize for this by doing things like increasing batch size/data parallelism vs sharding schemes with more comms.

At scale training won’t be able to avoid comms entirely, while many models can fit in a single MI300 for serving.

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

#64

Post by cs702 »

giancarlostoro wrote: post #57
cs702 wrote: post #55

OpenAI now has an option to buy 10% of AMD for $0.01 per share, subject to certain milestones. Basically, AMD is giving up equity to buy its way into the AI market. It's fantastic news , because OpenAI and AMD will now work together to develop decent software libraries for AI on AMD chips. We all want an alternative to Nvidia and cuda. This partnership could deliver it in the not too distant future.

My understanding from the more hardware savvy friends I have is that AMD is better for inference (so when you run a model) vs for training Nvidia is still king. Would be interesting if OpenAI does in fact take AMD's offer and how they use it (if they even share openly).

Today, yes, it's true that AMD hardware can be competitive mainly for inference.

The story here is about the future. Over time, OpenAI would benefit if AMD hardware becomes competitive for training too.

Nvidia currently gets to charge whatever the market can bear on its dominant training hardware.

If AMD hardware becomes a real alternative for training, Nvidia will be forced to compete on price.

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

#66

Post by tanh »

cs702 wrote: post #55

OpenAI now has an option to buy 10% of AMD for $0.01 per share, subject to certain milestones. Basically, AMD is giving up equity to buy its way into the AI market. It's fantastic news , because OpenAI and AMD will now work together to develop decent software libraries for AI on AMD chips. We all want an alternative to Nvidia and cuda. This partnership could deliver it in the not too distant future.

OpenAI are also using the market to fund some of their rollout instead of going public/giving up equity.

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

#67

Post by lelanthran »

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?

Price, for one. I don't mind running a local model at half the speed if all it costs is electricity.

A local model basically allows me to experiment with running an agent 24x7, 365 days a year with continuous prompting.

SaaS won't be able to match that.

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

#68

Post by AlanYx »

yousif_123123 wrote: post #39
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?

>Couldn't they just buy the AMD chips if they're good enough?

OpenAI would presumably need to raise money to buy the AMD chips.

The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI. Then OpenAI will presumably turn around and sell those shares (or borrow against them) to raise enough money to purchase the AMD GPUs.

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

#69

Post by tanh »

I don't know why Bloomberg TV are asking where this money comes from for OpenAI. It comes from the AMD stock holders. If the AMD stock pumps then OpenAI gets free money to buy more, without giving up equity. If it doesn't then OpenAI just walk away.

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

#70

Post by lelanthran »

cs702 wrote: post #55

OpenAI now has an option to buy 10% of AMD for $0.01 per share, subject to certain milestones. Basically, AMD is giving up equity to buy its way into the AI market. It's fantastic news , because OpenAI and AMD will now work together to develop decent software libraries for AI on AMD chips. We all want an alternative to Nvidia and cuda. This partnership could deliver it in the not too distant future.

It's only fantastic news if there is no bubble.

If there is a bubble, AMD just gave away $160m for nothing in return.

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