how long until this thing pops?
my money is on 18 months
OpenAI, Nvidia fuel $1T AI market with web of circular deals
71–80 of 321 posts
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#72Earlier quoted context omitted.
There's no way someone would be stupid enough to part with $x worth of product and $ 0.5 x worth of stock in exchange for $x, is there? Honestly, it's stupid to even make such an offer. What prevents AMD from turning it around on them? > AMD: Oh, since you put it like that, why don't you pay us $x for the chips and give us $ 0.5 x worth of stock? When your market cap rises by $ 0.5 x you'll get the money for those st…
>What prevents AMD from turning it around on them? Matt's telling is a little facetious, so the exact negotiation probably didn't go like that. More importantly, OpenAI has better options. If they want to pay AMD cash for chips, they could do that without also giving up their equity. The same can't be said for AMD. They're the second choice when it comes to GPUs, and they're desperate for market share, so they're wil…
bought Nvidia chips with cash
> NVIDIA intends to invest up to $100 billion in OpenAI progressively as each gigawatt is deployed.
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#73For an interesting interpretation of the recent AMD-OpenAI deal, see Matt Levine's column from a few days ago: > OpenAI: We would like six gigawatts worth of your chips to do inference. > AMD: Terrific. That will be $78 billion. How would you like to pay? > OpenAI: Well, we were thinking that we would announce the deal, and that would add $78 billion to the value of your company, which should cover it. > AMD: … > Ope…
This reminds me of the AOL Time Warner merger. "Back in the day", America Online (AOL) had a valuation large enough to pull it off:
It was the largest merger in history when completed with
the combined value of the companies at $360 billion.[0]
0 - https://en.wikipedia.org/wiki/AOL#2000%E2%80%932008:_As_AOL_...
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#74I can't legally define it yet, but I struggle to see how these deals aren't tax evasion, if not outright fraud.
That's not how taxes work. This isn't reddit, not everything is tax evasion.
OpenAI is spending little to no money on the hardware and AMD can claim both investment expenditure and revenue. I made clear that I'm not sure the intricacies of how that or may not be tax evasion or fraud, though I dotn see how it could be neither.
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#75Earlier quoted context omitted.
Stock buyback isn't a total scam as it seems, but it does mean "we can't figure out any productive use case for this cash in advancing R&D or scaling our business anymore" which is still pretty worrying
It’s more like, “the executives with lots of shares can’t see how to make the company grow, so they’ll just use profits to pump up the share price for their gain”. I deeply feel buybacks shouldn’t be illegal but treated shamefully. Instead of using profits to build up long term savings or fund R&D, they basically choose to do as little as possible. There is no vision.
Should companies never pay dividends?
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#76I don't understand why they are calling these deals circular. OpenAI is buying Nvidia and AMD chips. Oracle is also buying Nvidia chips. OpenAI is buying datacenters from Oracle, which will be powered by the chips Oracle buys from Nvidia. This is one directional: hardware makers (Nvidia and AMD) sell either to datacenter makers (Oracle), or to AI firms (like OpenAI). That's it. No circular deals. But "circular deals"…
I prefer https://www.bloomberg.com/news/features/2025-10-07/openai-s-... which shows the circularity in the deals. A stronger counterpoint to the circular deals suggestion is at the end of the article, which reads > Michael Intrator, CoreWeave’s CEO, acknowledged the circular financing worries in a recent interview with Bloomberg News, but said the public concerns will dissipate as more businesses adopt AI. > “When M…
“When Microsoft comes to use….” is he counting chickens before they hatch?
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#77For an interesting interpretation of the recent AMD-OpenAI deal, see Matt Levine's column from a few days ago: > OpenAI: We would like six gigawatts worth of your chips to do inference. > AMD: Terrific. That will be $78 billion. How would you like to pay? > OpenAI: Well, we were thinking that we would announce the deal, and that would add $78 billion to the value of your company, which should cover it. > AMD: … > Ope…
Discussed yesterday:
OpenAI is good at deals - https://news.ycombinator.com/item?id=45493815 (40 comments)
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#78This reminds me of around 2002 when I wrote an article looking at how all the web behemoths at the time were claiming profitability through ad sales, but actually the vast majority of ads were from one web behemoth advertising on an other's site and vice versa.
Same as capacity swaps in telecom of that era
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#79For an interesting interpretation of the recent AMD-OpenAI deal, see Matt Levine's column from a few days ago: > OpenAI: We would like six gigawatts worth of your chips to do inference. > AMD: Terrific. That will be $78 billion. How would you like to pay? > OpenAI: Well, we were thinking that we would announce the deal, and that would add $78 billion to the value of your company, which should cover it. > AMD: … > Ope…
Oh this just seems like the typical financial dealings that City of London invented to obfuscating ownership of holdings half millennium ago. Some would event argue this obfuscation what transferred power from the military to bankers. And it is how we end up in this transnational corporation where the public really have no idea who is owning what and who is actually running the show here.
Now we are just transferring the power from bankers -> tech/AI.
Re: OpenAI, Nvidia fuel $1T AI market with web of circular deals
#80For an interesting interpretation of the recent AMD-OpenAI deal, see Matt Levine's column from a few days ago: > OpenAI: We would like six gigawatts worth of your chips to do inference. > AMD: Terrific. That will be $78 billion. How would you like to pay? > OpenAI: Well, we were thinking that we would announce the deal, and that would add $78 billion to the value of your company, which should cover it. > AMD: … > Ope…
Does he explain why the valuation of the company would go up by $78 billion on the public news that AMD agreed to give $78 billion of goods to OpenAI for free?
It validates that MI450 works. Jensen was saying other GPUs are so bad that companies wouldn't even take them for free and then OpenAI said no, we actually will take AMD GPUs for free. They're not that bad.