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I would disagree, at least in the short term. Exhibit A: AMD's stock rose 36% at the announcement of their OpenAI circular deal. If 1+1 = 3 and there is potenti
by mvkel 10mo ago
I would disagree, at least in the short term. Exhibit A: AMD's stock rose 36% at the announcement of their OpenAI circular deal. If 1+1 = 3 and there is potential profit to be gleaned from such a deal, then it isn't circular, and is just plain good business. But the fact that AMD's stock collapsed back to where it was shortly after suggests otherwise
- mewpmewp2 10mo agoThis isn't to do with this being circular. It is moreso that AMD is thought to be falling behind in AI race, but OpenAI doing a deal with them is a strong indicator that they might have potential to come back.
- mvkel 10mo agoThat's a generous interpretation. The deal allows OpenAI to purchase up to 6GW of AMD GPUs, while AMD grants OpenAI warrants for up to 10% equity tied to performance milestones, creating a closed-loop of compute, equity, and potential self-funding hardware purchases. Circular. From the announcement per se, AMD's stock rose to a level that effectively canceled out whatever liabilities they were committing to as part of the deal, so it was all gravy, despite it being a press release
- mewpmewp2 10mo agoWhy is that generous? This is clearly showing OpenAI's belief in AMD, which in turn would give investors a large amount of confidence. A lot of that market cap came from Nvidia, which lost around 50B that day while AMD gained 70B in market cap. It all makes sense to me.
- mvkel 10mo agoWhy would it erase that same 70B just a week later? No more confidence?
- mewpmewp2 10mo agoWhere do you see the 70B being erased? But in any case it is also plausible that a confidence changes given new stream of constant information, so I don't see how it would be problematic if it did lose given new information.