This $100bn deal didn't cost anything and isn't worth anything. Remember back two weeks ago when Nvidia gave OpenAI $100bn so they can keep buying Nvidia GPUs? This is AMD trying to do the same, but they don't have $100bn so they are offering OpenAI share options to buy GPUs.
The share options will be worth at least $100bn too, if the conditions are met. But meeting the conditions will require buying huge numbers of GPUs from AMD. GPUs worth $100bn, and somewhere to put them. OpenAI can't afford that - not even close.
So they need to raise financing. On the face of it, the options seem to mean that lending OpenAI the money to buy the GPUs is perfectly safe. You take the stock options as collateral. You lend the money, OpenAI buy the GPUs, the AMD stock goes up, the option conditions are met, and even if OpenAI didn't pay you back the options will let you recover your investment.
However, this loan is far less safe than it first appears. The problem is that although lending the money allows openAI to buy GPUs, this doesn't necessarily cause AMD stock to rise. Infact if OpenAI don't find a profitable use for them then both their stock price, and AMD's will go down. And you'll be left with worthless collateral and a big loan to a company which can't afford to pay it back. So they haven't actually magically created financing at all. They just created the illusion of it. It's very clever. But it's fake. The real announcement will be when or if someone lends OpenAI cash.
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.
This depends significantly on the real cost of the gpu. The cost of enterprise ai GPUs is likely 2 orders of magnitude lower than the current list price. These deals avoid the need to markdown the price of the hardware to gain volume.
If I understand the math correctly. Amd could offer the GPUs at around a 20x discount to OpenAI on a deal worth 10-20 billion and be profitable on both amortized R&D and Cost of Goods sold.
> > Infact if OpenAI don't find a profitable use for them then both their stock price, and AMD's will go down.
In theory yes but OpenAI doesn't have a stock and in the word of AntiChrist Peter Thiel : "We only have AI, there is nothing else out there except for AI" so with the belief still strong to carry at least up until GPT 7 OpenAI will find ways to present itself to the world as capable of putting to use the AMD GPUs and AMD will benefit from it.
And honestly the anti Christ is right. Vibe coding is already bigger than self driving cars, the metaverse and all that stuff that emerged during covid
Wonder what they been doing so far, really, as it is only tinygrad that been voraciously pushing for these drivers in recent years, not even AMD themselves. Besides, given ClosedAI's the wonderful record of releasing stuff to the public, even if this happens, may benefit only inside tech, not the general audience.
it kinda worked in a way. AMD offered OpenAI 160 million stock options.
With AMD's stock jump today it's net worth increased about $35billion, close enough in value to those stocks option they gave away (if it was redeemed instantly).
It's too much of a coincidence so I'm guessing market makers and institutional shareholders priced it in their trading today.
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 cost of the GPUs with equity.
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?
Because of the vesting milestones the stock price of AMD would go up by such an extent that creating more s hares would not dilute the share price.
Obviously, for the stock price to go up money needs to come from somewhere. It makes sense that this deal would lower the NVidia stock price, so technically it will be NVidia investors waiting too long to respond to this news that will be paying for this. A tax on the mistaken believe that NVidia has an monopoly on putting transitions in a particular configuration which they obviously don't. The rest is just momentum and this would kill that.
"Subsidizing" is one way to put it. But these are options not shares. We will discover in a few years that it was actually AMD who is paying OpenAI to take GPUs.
It sure seems that way. The stock options are worth, at the current price of AMD stock, about 32.8 Billion dollars. AMD is giving out these stock options essentially for free in exchange of open ai purchasing chips from AMD.
So open ai are getting a 32.8 billion dollars rebate. But on what? Here the press releases are a bit vague. They say that Open ai committed to buying six gigawatts of AMD chips. Anybody know how to convert that into money?
> 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.
Ha ha, OpenAI can afford this because your mom uses a grand total of 7 pieces of software owned by 5 companies, 4 are the largest public companies in the world, and the 5th one is OpenAI.
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.
> It's fantastic news, because OpenAI and AMD will now work together to develop decent software libraries for AI on AMD chips.
Too fast to jump to conclusion. I'd say they will work together to develop software specifically designed for OpenAI products. It is a giant question mark whether we'll get libraries for general purpose computing out of this.
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).
Feels like we're living through a Michael Lewis book.
OpenAI estimate that it takes around $50bn to stand up a 1GW datacenter. This deal is 6GW worth of chips. Their projected revenues out to YE-2029 are $300bn. OpenAI will spend a decades worth of revenues building & filling the datacenters to house these chips, before accounting for their AI research, training, or inference spend.
Don't forget that OpenAI also has a similarly-massive deal with Oracle and another one with Nvidia. And its own Stargate initiative. And probably a couple more massive contracts with neoclouds to use more stuff.
Like best possible scenario is OpenAI merely optioning from literally everybody because they don't think they have a shot at getting any capacity otherwise. There is just no possible way that they can actually afford all of the buildouts. For that matter, there's not even any possible way for all of these buildouts to actually be completed.
This whole thing looks like a bubble in slow motion.
A “non-profit” that somehow buys stakes, signs multi-billion supply deals, and moves markets based on promises of future models — all while technically owning nothing tangible. They’re leveraging their own paper value to buy more paper value.
It’s circular finance at scale: every deal increases the perceived valuation, which then becomes collateral for the next one. No audited revenue stream, no proven business model - just a loop of hype, compute contracts, and self-referenced worth.
At some point, someone’s going to ask what exactly is being sold here besides narrative.
What surprises me is the pace and size of these announcements. So many announcements so fast and each one at least 100B all involving openai. Reminds me of a quote by Chuck Prince - Citigroup CEO from 2008 - "As long as the music is playing, you've got to get up and dance"
Finally. AMD had recently been pretty stagnant which made little sense given their dominance on CPU and vaguely competitive GPUs (cuda notwithstanding)
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 as X/OpenAI/Google. It's unclear if compute is the sole determiner of AI leadership in the long term or just a contributor.
IMO underappreciated is that a big bump in the AMD stock price helps AMD a lot because it will help it attract talent. NVIDIA has a lot of very talented people with high standards and that’s a huge part of their success.
When I was around 10 years old I remember us asking the teacher why not just print money to solve the worlds problems and the teacher scoffing. It took me another 15 years to realise that’s basically what central banks do, especially these last five years. BTC is at $125k, gold at $4000, and every other week we are inundated with some multi-hundred billion dollar deals somewhere or other. All this talk about multi GW data centers where one will notice the consumer is no where to be found, just like an extension lead plugged into itself.
Are we supposed to pretend that this is normal? Does anyone not feel like this push for AI is a last ditch effort to save the global stock market, that it MUST work out?
There are consumers but they are getting the stuff for free or close to that. Whether they will ever be monetized enough to pay for it all I don't know.
You forget one side of the equation: yes money is "printed" with abandon, but the other side gets an IOU, a debt, to repay with dividend.
The government BORROWS printed money, the FED emits debt against that money, and the hole keeps getting bigger. You certainly solved a short term problem, but you also created a long term one.
Meanwhile, people make less children, immigration is reduced, debt buyers, the ones receiving the interest, are starting to think twice, someone will be left with the bag and it's gonna be the 401k bondholders relying on these debt interest to finance their non productive retirement.
BTC is being bought maybe due to it's non correlation with those debts, but it's also printed virtually with absolutely no tangible value (the network can just collectively decide to change its rules with no legal repercussion), and gold definitely has tangible value (at least, it makes your wife smile and stop haggling when she gets some to put around her neck, so infinite value right there vs btc) and is bought in India and China to prepare for catastrophe, but it has many issues (heavy, hard to transport cross border, dangerous and expensive to store, concentrated in vaults against paper gold with all the issues that this creates etc)
Two years ago, I built my entire business exclusively on AMD on the bet that one day they would wake up to AI and dive head on into it. They were totally behind on NVIDIA and my feeling was that Lisa Su would not be able to ignore what was coming. This news far exceeds my expectations for how quickly things are changing. Feeling pretty good now.
The terms of some of these deals now are so completely bonkers it would be funny if it wasn’t so scary.
If someone was writing the script to “The Big Short 2” about the AI bubble they might struggle to come up with some of these things with a straight face.
Finance folks are salivating at the once in a generation opportunities ahead when this whole thing crumbles. CNBC seems to have at least one segment a day on “What’s your AI bubble burst play?”
Modulo the obvious financial chicanery, this does confirm to the market that Nvidia doesn't have a moat. So probably positive for AMD in the long term even when the deal itself goes sideways.
In a very real sense, OpenAI caused a 25% increase in AMD’s value by announcing the deal, and was allowed to capture about half of that out-of-nowhere value for itself by these options.
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. Which is very strange because she brutally competed with and destroyed Intel.
At the end od the day it is not the CEO who invents / designs / builds the stuff.
I mean, they could recognize that Nvdidia has better ecosystem and they could provide something similar (CEO's job is to set this), but saying "just make better chips" is kind of funny.
I mean, I worked in companies where the CEO couldnt figure this out, but come on. It's AMD.
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.
Whatever some analyst say about medium term future of stock markets. I can't see this ending in any other way than very ugly. Or USD to become meaningless...
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.
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.
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 their option. Yes, there is some dilution for existing shareholders, but only after a 5X gain.
OpenAI basically self financed the buying of tens of billions of dollars of GPUs by increasing the enterprise value of AMD, and taking a cut of that. And the increase in value is not just the announcement, but the integration work needed to make AMD GPUs as good as Nvidia for inference.
OpenAI is supposed to be buying something like $100 billion of chips from AMD. On top of the hundreds of billions to like five other companies for AI chips and other compute. Where do those several hundred billions come from? That's the question being asked here.
i grew up thinking finance was boring. after 2008, i started to pay a bit of attention, but the last few years of financial shenanigans have been absolute cinema, it feels like we are approaching the season finale.
And now imagine what will happen when OpenAI makes deals with Nvidia and AMD. Do you think Hyperscalers will just watch?
I expect Musk to make a $1 trillion deal soon. I guess, that's why he wants to get the $1 trillion from Tesla.
And do you think Meta, Amazon, Microsoft and Google will stand by while Altman and Musk are buying future supply from Nvidia and AMD?
I love that. As an investor in Nvidia, I hope that these future promises will push the stock 4-5x quickly in Cisco fashion because then I can sell and retire in my 40s with a huge pile of money watching the bubble explosion on some beach on an island :)
I wonder what we will do with all that compute if no one is going to use it...even if we achieve AGI it won't run on this generation of hardware. Are we just gonna brute force architectures or wtf is going on?
I assume there's at least one generation of re-sale value. There's a lot of smaller companies that could use GPU capacity and would if it was cheaper. I wonder how the math works out though -- are power requirements such that the actual costs aren't worth it? How long before the chips just get thrown away?
The good part is that the next financial crisis when OpenAI sinks probably won’t be a systemic one, it will definitely drag others down and the stock market will readjust, but hopefully the US economy will remain afloat
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?
I've been using Qwen3:32b on a 32GB M1 (asahi) and it does most of what I need, albeit a bit slow, but not slow enough that I´d pay monthly for remote ad delivery.
I suspect this huge splurge of hardware spending is partially an attempt to starve the market of cheap RAM and thus limit companies releasing 128GB/256GB standalone LLM boxes.
What's the benefit to running LLMs locally? Data is already remote, LLM inferencing isn't particularly constrained by Internet latency. So you get worse models, performance, and battery life. Local compute on a power constrained mobile device is required for applications that require low latency or significant data throughput and LLM inferencing is neither.
I feel like I’m reading headlines from 1929. Surely everyone knows how fake and pyramid all these deals are but no one seems to care, they all think they will find a chair when the music stops.
> 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.
Some comments were deferred for faster rendering.
fancyfredbot|4 months ago
The share options will be worth at least $100bn too, if the conditions are met. But meeting the conditions will require buying huge numbers of GPUs from AMD. GPUs worth $100bn, and somewhere to put them. OpenAI can't afford that - not even close.
So they need to raise financing. On the face of it, the options seem to mean that lending OpenAI the money to buy the GPUs is perfectly safe. You take the stock options as collateral. You lend the money, OpenAI buy the GPUs, the AMD stock goes up, the option conditions are met, and even if OpenAI didn't pay you back the options will let you recover your investment.
However, this loan is far less safe than it first appears. The problem is that although lending the money allows openAI to buy GPUs, this doesn't necessarily cause AMD stock to rise. Infact if OpenAI don't find a profitable use for them then both their stock price, and AMD's will go down. And you'll be left with worthless collateral and a big loan to a company which can't afford to pay it back. So they haven't actually magically created financing at all. They just created the illusion of it. It's very clever. But it's fake. The real announcement will be when or if someone lends OpenAI cash.
coliveira|4 months ago
lumost|4 months ago
If I understand the math correctly. Amd could offer the GPUs at around a 20x discount to OpenAI on a deal worth 10-20 billion and be profitable on both amortized R&D and Cost of Goods sold.
wmf|4 months ago
Nah, nothing in the current market is based on fundamentals.
JumpinJack_Cash|4 months ago
In theory yes but OpenAI doesn't have a stock and in the word of AntiChrist Peter Thiel : "We only have AI, there is nothing else out there except for AI" so with the belief still strong to carry at least up until GPT 7 OpenAI will find ways to present itself to the world as capable of putting to use the AMD GPUs and AMD will benefit from it.
And honestly the anti Christ is right. Vibe coding is already bigger than self driving cars, the metaverse and all that stuff that emerged during covid
tim333|4 months ago
I don't think lending money against stock options would be considered at all safe.
However the deal may work along the lines of:
Investors buy AMD shares, send the price up.
OpenAI uses it's option to buy shares for 1c, sell the to the investors for far more, use the profit to buy AMD GPUs.
So it potentially works very well for OpenAI, ok for AMD and questionably for the investors funding it buy buying AMD shares.
Havoc|4 months ago
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
larodi|4 months ago
Wonder what they been doing so far, really, as it is only tinygrad that been voraciously pushing for these drivers in recent years, not even AMD themselves. Besides, given ClosedAI's the wonderful record of releasing stuff to the public, even if this happens, may benefit only inside tech, not the general audience.
didntknowyou|4 months ago
With AMD's stock jump today it's net worth increased about $35billion, close enough in value to those stocks option they gave away (if it was redeemed instantly).
It's too much of a coincidence so I'm guessing market makers and institutional shareholders priced it in their trading today.
nerdix|4 months ago
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 cost of the GPUs with equity.
HarHarVeryFunny|4 months ago
It seems to basically give OpenAI an incentive to go thru with the deal.
yousif_123123|4 months ago
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?
ralfn|4 months ago
Obviously, for the stock price to go up money needs to come from somewhere. It makes sense that this deal would lower the NVidia stock price, so technically it will be NVidia investors waiting too long to respond to this news that will be paying for this. A tax on the mistaken believe that NVidia has an monopoly on putting transitions in a particular configuration which they obviously don't. The rest is just momentum and this would kill that.
The real winners will be TSMC and ASML
acchow|4 months ago
hristov|4 months ago
So open ai are getting a 32.8 billion dollars rebate. But on what? Here the press releases are a bit vague. They say that Open ai committed to buying six gigawatts of AMD chips. Anybody know how to convert that into money?
doctorpangloss|4 months ago
Ha ha, OpenAI can afford this because your mom uses a grand total of 7 pieces of software owned by 5 companies, 4 are the largest public companies in the world, and the 5th one is OpenAI.
colordrops|4 months ago
strangattractor|4 months ago
If this ship sinks they are all going down together.
unknown|4 months ago
[deleted]
giancarlostoro|4 months ago
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.
dist-epoch|4 months ago
Yes, you are reading it wrong. The big winner here is AMD, not OpenAI.
If there is any signal here, it's that AMD is still in the AI game. AMD stock is up 30% on this news.
coliveira|4 months ago
dagaci|4 months ago
cs702|4 months ago
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.
rs186|4 months ago
Too fast to jump to conclusion. I'd say they will work together to develop software specifically designed for OpenAI products. It is a giant question mark whether we'll get libraries for general purpose computing out of this.
giancarlostoro|4 months ago
unknown|4 months ago
[deleted]
tanh|4 months ago
lelanthran|4 months ago
If there is a bubble, AMD just gave away $160m for nothing in return.
OtherShrezzing|4 months ago
OpenAI estimate that it takes around $50bn to stand up a 1GW datacenter. This deal is 6GW worth of chips. Their projected revenues out to YE-2029 are $300bn. OpenAI will spend a decades worth of revenues building & filling the datacenters to house these chips, before accounting for their AI research, training, or inference spend.
jcranmer|4 months ago
Like best possible scenario is OpenAI merely optioning from literally everybody because they don't think they have a shot at getting any capacity otherwise. There is just no possible way that they can actually afford all of the buildouts. For that matter, there's not even any possible way for all of these buildouts to actually be completed.
TheAlchemist|4 months ago
We definitely are ! The BIG question is - what chapter are we in ?
amir734jj|4 months ago
razoorka|4 months ago
A “non-profit” that somehow buys stakes, signs multi-billion supply deals, and moves markets based on promises of future models — all while technically owning nothing tangible. They’re leveraging their own paper value to buy more paper value.
It’s circular finance at scale: every deal increases the perceived valuation, which then becomes collateral for the next one. No audited revenue stream, no proven business model - just a loop of hype, compute contracts, and self-referenced worth.
At some point, someone’s going to ask what exactly is being sold here besides narrative.
bwfan123|4 months ago
alberth|4 months ago
As a comparison of stocks over the last 5-years:
Today, AMD is up ~30% (which wipes the past year stock slump).So a healthy portion of AMD overall 5-years gain are just from this announcement today.
And OpenAI ($0.50T) is currently valued more than AMD ($0.35T) itself.
https://finance.yahoo.com/quote/NVDA/
https://finance.yahoo.com/quote/AMD/
Havoc|4 months ago
koakuma-chan|4 months ago
amacbride|4 months ago
It’s definitely lacking in stability and polish compared to what NVIDIA has built. (Ask me why I’m on my third rebuild of LAMMPS this morning…)
buyucu|4 months ago
lumost|4 months ago
layla5alive|4 months ago
cameldrv|4 months ago
Argonaut998|4 months ago
Are we supposed to pretend that this is normal? Does anyone not feel like this push for AI is a last ditch effort to save the global stock market, that it MUST work out?
tim333|4 months ago
xwolfi|4 months ago
The government BORROWS printed money, the FED emits debt against that money, and the hole keeps getting bigger. You certainly solved a short term problem, but you also created a long term one.
Meanwhile, people make less children, immigration is reduced, debt buyers, the ones receiving the interest, are starting to think twice, someone will be left with the bag and it's gonna be the 401k bondholders relying on these debt interest to finance their non productive retirement.
BTC is being bought maybe due to it's non correlation with those debts, but it's also printed virtually with absolutely no tangible value (the network can just collectively decide to change its rules with no legal repercussion), and gold definitely has tangible value (at least, it makes your wife smile and stop haggling when she gets some to put around her neck, so infinite value right there vs btc) and is bought in India and China to prepare for catastrophe, but it has many issues (heavy, hard to transport cross border, dangerous and expensive to store, concentrated in vaults against paper gold with all the issues that this creates etc)
latchkey|4 months ago
JCM9|4 months ago
If someone was writing the script to “The Big Short 2” about the AI bubble they might struggle to come up with some of these things with a straight face.
Finance folks are salivating at the once in a generation opportunities ahead when this whole thing crumbles. CNBC seems to have at least one segment a day on “What’s your AI bubble burst play?”
unknown|4 months ago
[deleted]
dboreham|4 months ago
semiquaver|4 months ago
In a very real sense, OpenAI caused a 25% increase in AMD’s value by announcing the deal, and was allowed to capture about half of that out-of-nowhere value for itself by these options.
andrewstuart|4 months ago
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. Which is very strange because she brutally competed with and destroyed Intel.
thejohnconway|4 months ago
Maybe making cutting-edge GPUs is actually quite an engineering challenge, and not entirely down to the competitive will of the CEO?
tbrownaw|4 months ago
What's the standard that they're underwhelming relative to? I thought Nvidia was the current big fish there.
rvba|4 months ago
I mean, they could recognize that Nvdidia has better ecosystem and they could provide something similar (CEO's job is to set this), but saying "just make better chips" is kind of funny.
I mean, I worked in companies where the CEO couldnt figure this out, but come on. It's AMD.
mv4|4 months ago
archerx|4 months ago
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.
findthewords|4 months ago
Ekaros|4 months ago
thiago_fm|4 months ago
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.
dboreham|4 months ago
So...after the next election and a bunch of significant US governance reforms.
resters|4 months ago
lsaferite|4 months ago
melodyogonna|4 months ago
gowld|4 months ago
Cash-poor OpenAI pledges/promises about ~$100B in purchases.
AMD makes back the money on (a) 30% volume discount is normal? (b) stock pop from AI hype (AMD popped up ~$100B market cap on the news.) ?
nickysielicki|4 months ago
rfv6723|4 months ago
https://www.amd.com/en/products/accelerators/pensando.html
betaby|4 months ago
pier25|4 months ago
On top of the gpus... AMD has offered cheap equity to sweeten the deal and help them get financing to pay for the gpus.
Am I getting this right?
jgalt212|4 months ago
WhereIsTheTruth|4 months ago
It was inevitable, this basically marks the end of affordable gaming GPUs, upgrade while you still can
tanh|4 months ago
jpadkins|4 months ago
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 their option. Yes, there is some dilution for existing shareholders, but only after a 5X gain.
OpenAI basically self financed the buying of tens of billions of dollars of GPUs by increasing the enterprise value of AMD, and taking a cut of that. And the increase in value is not just the announcement, but the integration work needed to make AMD GPUs as good as Nvidia for inference.
jcranmer|4 months ago
rhetocj23|4 months ago
buyucu|4 months ago
SecretDreams|4 months ago
alwahi|4 months ago
Jlagreen|4 months ago
And now imagine what will happen when OpenAI makes deals with Nvidia and AMD. Do you think Hyperscalers will just watch?
I expect Musk to make a $1 trillion deal soon. I guess, that's why he wants to get the $1 trillion from Tesla.
And do you think Meta, Amazon, Microsoft and Google will stand by while Altman and Musk are buying future supply from Nvidia and AMD?
I love that. As an investor in Nvidia, I hope that these future promises will push the stock 4-5x quickly in Cisco fashion because then I can sell and retire in my 40s with a huge pile of money watching the bubble explosion on some beach on an island :)
cubefox|4 months ago
BoredPositron|4 months ago
nharada|4 months ago
grim_io|4 months ago
Those GPU's will finally push pixels again :)
unknown|4 months ago
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robotswantdata|4 months ago
mrweasel|4 months ago
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didntknowyou|4 months ago
alberth|4 months ago
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
melenaboija|4 months ago
tesdinger|4 months ago
unknown|4 months ago
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unknown|4 months ago
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randomname4325|4 months ago
jeswin|4 months ago
aswegs8|4 months ago
whitehexagon|4 months ago
I've been using Qwen3:32b on a 32GB M1 (asahi) and it does most of what I need, albeit a bit slow, but not slow enough that I´d pay monthly for remote ad delivery.
I suspect this huge splurge of hardware spending is partially an attempt to starve the market of cheap RAM and thus limit companies releasing 128GB/256GB standalone LLM boxes.
simianwords|4 months ago
TiredOfLife|4 months ago
baq|4 months ago
kcb|4 months ago
Mistletoe|4 months ago
unknown|4 months ago
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zerosizedweasle|4 months ago
rozap|4 months ago
theli0nheart|4 months ago
This is money printing, just in the private sector. We know what happens when governments do it, and it's not good.
john-h-k|4 months ago
It could be bad sure but it’s not money printing
diego_sandoval|4 months ago
tesdinger|4 months ago
seydor|4 months ago
Who DOESN't have a deal with them
the_duke|4 months ago
Rising tide lifts all boats.
triceratops|4 months ago
cluckindan|4 months ago
progx|4 months ago
itsnowandnever|4 months ago
ihsw|4 months ago
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waltercool|4 months ago
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mugivarra69|4 months ago
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vicentwu|4 months ago