Wall Street analysts explain how AMD’s own stock will pay for OpenAI’s billions in chip purchases
Wall Street analysts explain how AMD’s own stock will pay for OpenAI’s billions in chip purchases
Wall Street analysts explain how AMD’s own stock will pay for OpenAI’s billions in chip purchases | TechCrunch
AMD has granted OpenAI a boatload of stock warrants — up to 160 million AMD shares — which will vest in tranches as certain milestones are achieved. Those milestones include specific increases in the stock price, with the last tranche dependent on AMD shares soaring to $600 apiece, AMD disclosed. They were trading at about $165 before the news hit and soared to $214 by market close Monday after the announcement.
If the stock price hits its marks, and OpenAI achieves all its required contributions, and OpenAI holds all of AMD’s shares, not selling any along the way, OpenAI may make enough on AMD stock to pay for a lot of GPUs. The stock could be worth about $100 billion.
“We would note that the final 6th tranche requires ~$1T market cap to vest – ergo, if OAI were to hold stock until the end of the deal, its stake would be worth ~$100B,” writes UBS analyst Timothy Arcuri in a research note on Tuesday.
But Arcuri believes that a more likely scenario is that OpenAI will sell its AMD stock along the way to pay its AMD bill. So, essentially, this is a scheme for AMD to finance this customer’s purchases.
These guys are building such a big fucking house of cards, it's actually funny to watch.
It's like people are putting money up in a ginormous pile so that they can set it ablaze, in a weird sacrifice to the gods of infinite growth.
I mean it will probs cripple the US economy and world trade with it when it all comes down, but it really feels like the first section of the rollercoaster where you watch with exhilaration how high can this get.
The only question is how big the splash damage is going to be.
I'm in technology, but not AI. I'm not sure that distinction will be enough.
Me too, but we can't really do anything but watch.
That said, I don't even think it's going to wipe out that much in terms of jobs. VC funded places already went tits up because the Trump recession killed free money, and the rest got poured into buying GPUs to serve as collateral to buy even more GPUs to make a chatbot.
As long as your company does not depend on said chatbot, IDK what else could happen. It's not like anyone who could be laid off is not being laid off already, and it's not like a ton of people are actually employed by companies built on top of this bubble, are they?
Some people are going to make billions and promptly lose it in minutes on some insane WallStreetBets option spreads though when the market starts getting choppy.
I'm in the EU though, so my heart goes out to people in the US.
Think giant asteroid. At least that much.
It's an incredible house of cards, and I'm honestly coming to suspect that's the point. These companies have some of the greatest financial experts in the world working for them. They can't possibly not know how fucked they are in the long run.
But the long run is the long run. I'm confident Trump and his billionaire tech bro lackeys can pump enough money and silence enough regulators to keep the bubble afloat until 2029.
If Democrats take power in 2029, or if Democrats take the House in 2027 and start doing something effective (lol), then the tech bros pull the plug, blame liberals and illegals for crashing the economy, and guide the predictable conservative / authoritarian backlash to their benefit.
Yay, technofeudalism.
The government shutdown might pop the bubble early.
US Dems are as pro AI as the Republicans. Big tech doesn't need to stay on one side.
It would be fun to watch if it wouldn't be (as always) the working class that's going to pay when the bubble bursts. Be it austerity measures, buyouts of "too big to fail" companies with tax money of people actually paying taxes (so not the rich) or whatever else. The people playing the bubble now won't be affected by the burst. The rich get even richer in crisis.
There is a saying in Hungary, "a Hungarian cries in celebration". It roughly means that you have to keep being able to laugh at life's absurdities because they come more often than happily ever afters.
I mean one the one hand you're absolutely right, but on the other hand you need to look at these idiots as they are in their pathetic and laughable selves. I'm not saying the situation is funny, it couldn't be more serious, I'm saying the fact that the supposed "elite" of the "home of innovation", Silicon Valley, came together and the best thing that they could do to make up a new groundbreaking idea to transform the economy was...
...a chatbot that can confidently lie.
I'm not laughing at the people losing their jobs, my heart goes out to them, I'm laughing at Jeff Bezos and Elon Musk who have the imagination and the ability that they are demonstrating right now. They deserve to be ridiculed and laughed at.