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> 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 c
by theli0nheart 1y ago
> 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.
- john-h-k 1y agoIt’s quite specifically not money printing, because it’s backed by something. It could be bad sure but it’s not money printing
- theli0nheart 1y agoBacked by what?
- kaptainscarlet 1y agoCompute resources.
- w3ll_w3ll_w3ll 1y agoSo like Bitcoin?
- denismenace 1y agoNot the same, since if you buy Bitcoin, you don't have partial ownership of the machines used to mine and also these machines being used for a singular purpose which you cannot change.
- vel0city 1y agoAnd high end networking gear will always have a buyer, right Nortel?
- dsr_ 1y agoLucent agrees: even used, the product will retain 90% of list price because the market has an infinite number of VC-backed buyers.
- rvba 1y agoIt is backed by AMD stockholders, whose stock just got diluted. It's like in that movie "Social network"
- aurareturn 1y agoOwnership in a company.
- deleted 1y ago[deleted]
- SecretDreams 1y ago> because it’s backed by something If I finance a car backed by hopes and dreams, I'd be driving real good.
- fauigerzigerk 1y agoYou're right. It's not really money printing, at least not directly. Only banks can print money. What these recent deals do is inflate asset prices by making (future) revenues appear higher or perhaps just more certain than they really are. Assets can be used as collateral for loans. If someone were to use their AMD shares as collateral for a loan at a commercial bank (not a margin loan), that would be money printing and you could print more of it today than before the deal was announced.
- diego_sandoval 1y agoI'm very ignorant, will AMD shares get diluted? or how is it money printing?
- lotsofpulp 1y agoIt isn’t printing money (money supply was not increased, and no one has access to more money due to the contract signed between the two parties), but I assume it makes the poster feel good to be outraged and express it by writing something like that.
- theli0nheart 1y agoAMD's valuation increased by over 30% this morning, so to say no one has access to more money because of this news is untrue. I'm not outraged at all, I just think this sort of bizarre financial engineering is not a good sign. If the ROI was so obvious, why not, for example, simply issue bonds and buy AMD stock on the open market?
- lotsofpulp 1y agoI wrote: > and no one has access to more money due to the contract signed between the two parties If a third party decides to pay a higher price for a publicly listed share because of the news of this contract, that is not printing money. The buyer of the shares loses money, the seller gains it, for a net change of zero in money supply.
- rchaud 1y agoIf OAI issued bonds, they'd be carrying all the risk. With these deals with Microsoft, Nvidia and now AMD, they're shifting some of that risk to powerful players in the "too big to let fail" category.
- theli0nheart 1y agoWell, yeah, that's exactly my point. OpenAI is not issuing bonds because these transactions are way riskier than people are willing to admit.
- tesdinger 1y agoIt'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.