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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

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?

zerosizedweasle 1y ago
This is too top of the top to ignore. Everyone can see the scam now, it's a joke
AlanYx 1y ago
>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.
- rhetocj23 1y ago
  Financing made out of thin air. Hilarious
  - lesuorac 1y ago
    Not thin air. Existing AMD shareholders will have their holding diluted. Or assuming banks loan them money, if say OpenAI goes under then the banks just lose that money.
    - wmf 1y ago
      When the stock goes from $150 to $600 that's not called dilution. Nobody cares about the number of shares in that situation.
      - lesuorac 1y ago
        The CEO of Tesla, Elon Musk, was sued over an extremely similar situation. So somebody will care. That said, this is really about the principal. Sure, if I give you $10 and you give me a hamburger it's not like some illegal transaction. But to say the $10 comes from thin air is wrong. It doesn't come from thin air. I would bet that if one day OpenAI decided to sell 10% of AMD the stock would crash from $600 to below $150. IIUC, there's 1.6B shares of AMD while only 54M shares trade daily so dumping 160M shares would tank their price [1]. If AMD gives OpenAI 10% of the company and OpenAI goes under, it's going to take AMD's share price with it. [1]: https://www.marketwatch.com/investing/stock/amd https://www.marketwatch.com/investing/stock/amd
        gowld 1y ago
        What Musk suit are you talking about? The rest of your comment doesn't make sense.
        lesuorac 1y ago
        His 56 billion pay package [1]. In order for him to receive it the stock would need to increase 13x [2] (the AMD stock increase from 150 to 600 is only 4x). Despite succeeding at doing that, he and Tesla were sued over the pay package. If OpenAI fails then its going to have to liquidate the company. Selling 160M shares of AMD is going to tank it's price. [1]: https://en.wikipedia.org/wiki/List_of_lawsuits_involving_Tesla,_Inc.#Litigation_relating_to_2018_CEO_performance_award https://en.wikipedia.org/wiki/List_of_lawsuits_involving_Tes... [2]: https://ir.tesla.com/press-release/tesla-announces-new-long-term-performance-award-elon-musk https://ir.tesla.com/press-release/tesla-announces-new-long-...
        wmf 1y ago
        I think there's a covenant preventing OpenAI from dumping AMD shares on the open market. Obviously AMD's price will move down during the crash but at least the shares will be liquidated in an orderly fashion.
        1y ago
  - zerosizedweasle 1y ago
    It's a joke that it is so obvious what they are doing.
- DebtDeflation 1y ago
  It's just round tripping with an extra step or two. AMD giving OpenAI money (via stock options) that they can use to buy AMD chips.
  - lotsofpulp 1y ago
    That “just” is doing a lot of work equivocating stock options with money. If that were true, there would never be any business that failed.
    - zerosizedweasle 1y ago
      It's circular money flows.
      - johnnyanmac 1y ago
        Two circular flows now. Nvidia Oracle and OpenAI, and now this loop with OpenAI and AMD. This really isn't the sign of a healthy economy.
    - formerly_proven 1y ago
      These are options with a 99.995% discount (as of this writing) on AMD stock.
- Pet_Ant 1y ago
  It seems to me that there is an aspect of marketing to this deal. Nvidia has the mindshare, so this would help legitimise AMD offerings. This is almost product placement/sponsorship for AMD. Also, this would battle test AMD's platform and provide enhancements so it's also a beta-testing service.
- Aurornis 1y ago
  > The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI. There's no giving away of anything in the deal. The $0.01 per share price is only available if they purchase the GPUs. It's more like one of those "free with purchase" deals where you're still paying for the product, but they throw in something to sweeten the deal. They're not actually getting AMD shares at $0.01 each with no strings attached like many of the comments are assuming.
  - AlanYx 1y ago
    Yes, I was being somewhat flippant in my description of the transaction. But the net result of the transaction is the same. OpenAI can finance the GPU purchases by borrowing against the contractual guarantees it received from AMD to receive warrants in exchange for acquiring AMD GPUs. Whether the transaction is partially or entirely financed will depend on AMD's share price movement in the interim.
  - kalap_ur 1y ago
    They sign the purchase order on 1/1/26. AMD issues invoice to be paid in 30 days, that is 2/1/26. OpenAI triggers warrant and informs AMD on 1/2/26. OpenAI receives shares on 1/4/26. On 1/5/26 OpenAI and AMD announce the GPU purchase deal. On 1/30/26 OpenAI sells its shares in AMD. From proceeds, OpenAI pays AMD on 2/1/26. Thus, AMD financed OpenAI's GPU purchase via AMD's shares.
    - munksbeer 1y ago
      The rest of the world trying to decipher this post because of the date format :headscratch:
      - eldgfipo 1y ago
        DD/MM/YYYY please
        munksbeer 1y ago
N70Phone 1y ago
> 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? It's one big game of musical chairs, and everyone can hear the phonograph slowing down. OpenAI is making these desperation plays because they've ran out of hype. GPT-5 "bombed", the wider public doesn't believe AI is going to keep getting exponentially better anymore. They're out of options to generate new hype beyond spewing ever larger numbers into the news cycle. AMD is making this desperation play because soon, once the AI bubble pops, there'll be a flood of cheap unused GPUs & GPU compute. Nobody's going to be buying their new cards when you can get Nvidia's prior gen for pennies on the dollar.
- CyanLite2 1y ago
  On the flip side of it (and where most institutional investors are mentally) is that if OpenAI is to ever achieve AGI, it must invest nearly a trillion dollars towards that effort. We all know LLMs have their limitations, but next phase of AI growth is going to come from OpenAI, Anthropic, Google, maybe even Microsoft, and not some stealth startup. E.g., Only Big Tech can get us to AGI due to sheer massive amounts of investments, not a traditional silicon valley garage startup looking for their Series A. So institutional investors have no choice but to continue to throw money into Big Tech hoping for the Big Payoff, rather than investing in VC funds like 10 years ago. AMD did this deal because it's literally offering financing to them. OpenAI doesn't have access to capital markets like AMD does. So it's selling off shares of its own stock to finance the purchase of billions of dollars worth of GPUs. And the trick appears to be working since the stock is up 30% today, meaning it has paid for itself and then some.
  - rhetocj23 1y ago
    Theres a phrase for this. Financial engineering.
    - zerosizedweasle 1y ago
      In other words they are stealing capital from the rest of the economy. Starving it.
alberth 1y ago
> allows OpenAI to buy 160 million shares at 1 cents a share. > I think at least part of the 10% is if AMD stock reaches 600. AMD market cap today is $350B (at $200/share). AMD would need to 3x their market cap ($1,000B) to be at $600/share. Which would mean that OpenAI could gain $100B in AMD stock, for the minuscule cost of only $1.6 million (160 million shares at 1 cent each). -- Sam is spinning the world on his finger tip with these deals he's crafting.
- SirMaster 1y ago
  Is there any real reason AMDs market cap can't be close to what Nvidia's is? Or like even half of what Nvidia's is?
  - dbbr 1y ago
    My uneducated one word answer: CUDA.
    - alwahi 1y ago
      if your castle had a moat like CUDA....
      - CuriouslyC 1y ago
        CUDA isn't even a moat for inference, only for training.
      - jakogut 1y ago
        How's Microsoft's Direct3D moat working out for them now? It's turned out to have been much less of a moat than it once was. Triple-A titles that are developed for Windows using Direct3D 12 are getting support on Linux through Proton within days of release, or even at launch sometimes.
    - preisschild 1y ago
      Could quickly change if open alternatives were suddenly more popular or with stuff like ZLUDA https://github.com/vosen/ZLUDA https://github.com/vosen/ZLUDA

zerosizedweasle 1y ago

This is too top of the top to ignore. Everyone can see the scam now, it's a joke

AlanYx 1y ago

>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.

rhetocj23 1y ago
Financing made out of thin air. Hilarious
- lesuorac 1y ago
  Not thin air. Existing AMD shareholders will have their holding diluted. Or assuming banks loan them money, if say OpenAI goes under then the banks just lose that money.
  - wmf 1y ago
    When the stock goes from $150 to $600 that's not called dilution. Nobody cares about the number of shares in that situation.
    - lesuorac 1y ago
      The CEO of Tesla, Elon Musk, was sued over an extremely similar situation. So somebody will care. That said, this is really about the principal. Sure, if I give you $10 and you give me a hamburger it's not like some illegal transaction. But to say the $10 comes from thin air is wrong. It doesn't come from thin air. I would bet that if one day OpenAI decided to sell 10% of AMD the stock would crash from $600 to below $150. IIUC, there's 1.6B shares of AMD while only 54M shares trade daily so dumping 160M shares would tank their price [1]. If AMD gives OpenAI 10% of the company and OpenAI goes under, it's going to take AMD's share price with it. [1]: https://www.marketwatch.com/investing/stock/amd https://www.marketwatch.com/investing/stock/amd
      - gowld 1y ago
        What Musk suit are you talking about? The rest of your comment doesn't make sense.
        lesuorac 1y ago
        His 56 billion pay package [1]. In order for him to receive it the stock would need to increase 13x [2] (the AMD stock increase from 150 to 600 is only 4x). Despite succeeding at doing that, he and Tesla were sued over the pay package. If OpenAI fails then its going to have to liquidate the company. Selling 160M shares of AMD is going to tank it's price. [1]: https://en.wikipedia.org/wiki/List_of_lawsuits_involving_Tesla,_Inc.#Litigation_relating_to_2018_CEO_performance_award https://en.wikipedia.org/wiki/List_of_lawsuits_involving_Tes... [2]: https://ir.tesla.com/press-release/tesla-announces-new-long-term-performance-award-elon-musk https://ir.tesla.com/press-release/tesla-announces-new-long-...
        wmf 1y ago
        I think there's a covenant preventing OpenAI from dumping AMD shares on the open market. Obviously AMD's price will move down during the crash but at least the shares will be liquidated in an orderly fashion.
        1y ago
- zerosizedweasle 1y ago
  It's a joke that it is so obvious what they are doing.
DebtDeflation 1y ago
It's just round tripping with an extra step or two. AMD giving OpenAI money (via stock options) that they can use to buy AMD chips.
- lotsofpulp 1y ago
  That “just” is doing a lot of work equivocating stock options with money. If that were true, there would never be any business that failed.
  - zerosizedweasle 1y ago
    It's circular money flows.
    - johnnyanmac 1y ago
      Two circular flows now. Nvidia Oracle and OpenAI, and now this loop with OpenAI and AMD. This really isn't the sign of a healthy economy.
  - formerly_proven 1y ago
    These are options with a 99.995% discount (as of this writing) on AMD stock.
Pet_Ant 1y ago
It seems to me that there is an aspect of marketing to this deal. Nvidia has the mindshare, so this would help legitimise AMD offerings. This is almost product placement/sponsorship for AMD. Also, this would battle test AMD's platform and provide enhancements so it's also a beta-testing service.
Aurornis 1y ago
> The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI. There's no giving away of anything in the deal. The $0.01 per share price is only available if they purchase the GPUs. It's more like one of those "free with purchase" deals where you're still paying for the product, but they throw in something to sweeten the deal. They're not actually getting AMD shares at $0.01 each with no strings attached like many of the comments are assuming.
- AlanYx 1y ago
  Yes, I was being somewhat flippant in my description of the transaction. But the net result of the transaction is the same. OpenAI can finance the GPU purchases by borrowing against the contractual guarantees it received from AMD to receive warrants in exchange for acquiring AMD GPUs. Whether the transaction is partially or entirely financed will depend on AMD's share price movement in the interim.
- kalap_ur 1y ago
  They sign the purchase order on 1/1/26. AMD issues invoice to be paid in 30 days, that is 2/1/26. OpenAI triggers warrant and informs AMD on 1/2/26. OpenAI receives shares on 1/4/26. On 1/5/26 OpenAI and AMD announce the GPU purchase deal. On 1/30/26 OpenAI sells its shares in AMD. From proceeds, OpenAI pays AMD on 2/1/26. Thus, AMD financed OpenAI's GPU purchase via AMD's shares.
  - munksbeer 1y ago
    The rest of the world trying to decipher this post because of the date format :headscratch:
    - eldgfipo 1y ago
      DD/MM/YYYY please
      - munksbeer 1y ago

N70Phone 1y ago

> 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? It's one big game of musical chairs, and everyone can hear the phonograph slowing down. OpenAI is making these desperation plays because they've ran out of hype. GPT-5 "bombed", the wider public doesn't believe AI is going to keep getting exponentially better anymore. They're out of options to generate new hype beyond spewing ever larger numbers into the news cycle. AMD is making this desperation play because soon, once the AI bubble pops, there'll be a flood of cheap unused GPUs & GPU compute. Nobody's going to be buying their new cards when you can get Nvidia's prior gen for pennies on the dollar.

CyanLite2 1y ago
On the flip side of it (and where most institutional investors are mentally) is that if OpenAI is to ever achieve AGI, it must invest nearly a trillion dollars towards that effort. We all know LLMs have their limitations, but next phase of AI growth is going to come from OpenAI, Anthropic, Google, maybe even Microsoft, and not some stealth startup. E.g., Only Big Tech can get us to AGI due to sheer massive amounts of investments, not a traditional silicon valley garage startup looking for their Series A. So institutional investors have no choice but to continue to throw money into Big Tech hoping for the Big Payoff, rather than investing in VC funds like 10 years ago. AMD did this deal because it's literally offering financing to them. OpenAI doesn't have access to capital markets like AMD does. So it's selling off shares of its own stock to finance the purchase of billions of dollars worth of GPUs. And the trick appears to be working since the stock is up 30% today, meaning it has paid for itself and then some.
- rhetocj23 1y ago
  Theres a phrase for this. Financial engineering.
  - zerosizedweasle 1y ago
    In other words they are stealing capital from the rest of the economy. Starving it.

alberth 1y ago

> allows OpenAI to buy 160 million shares at 1 cents a share. > I think at least part of the 10% is if AMD stock reaches 600. AMD market cap today is $350B (at $200/share). AMD would need to 3x their market cap ($1,000B) to be at $600/share. Which would mean that OpenAI could gain $100B in AMD stock, for the minuscule cost of only $1.6 million (160 million shares at 1 cent each). -- Sam is spinning the world on his finger tip with these deals he's crafting.

SirMaster 1y ago
Is there any real reason AMDs market cap can't be close to what Nvidia's is? Or like even half of what Nvidia's is?
- dbbr 1y ago
  My uneducated one word answer: CUDA.
  - alwahi 1y ago
    if your castle had a moat like CUDA....
    - CuriouslyC 1y ago
      CUDA isn't even a moat for inference, only for training.
    - jakogut 1y ago
      How's Microsoft's Direct3D moat working out for them now? It's turned out to have been much less of a moat than it once was. Triple-A titles that are developed for Windows using Direct3D 12 are getting support on Linux through Proton within days of release, or even at launch sometimes.
  - preisschild 1y ago
    Could quickly change if open alternatives were suddenly more popular or with stuff like ZLUDA https://github.com/vosen/ZLUDA https://github.com/vosen/ZLUDA