[alberth]

> 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.

[lucianbr]

What is AMD getting that's worth giving OpenAI $100B? Sure, they're giving it from other stockholders not from their pocket, but still. It's presumably a lot of value, there has to be a good reason, no?

Is it that Sam promises to somehow make AMD increase their market cap, or help at least?

[delusional]

> What is AMD getting that's worth giving OpenAI $100B?

The other $300B

[lucianbr]

Where is this other $300B coming from? Is OpenAI paying AMD $400B or what? I looked at the article but it seems disjointed and hard to parse for me. And I don't see where it mentions some $400B coming to AMD one way or another. It's implied... how?

Sorry, this isn't sarcasm or anything like it. I just don't get it and your answer does not help.

[delusional]

The traditional "efficient market" theory would be: synergies. The market believes that AMDs value increased BECUASE OpenAI now owns it. That is to say, the market believes that OpenAI taking a stake in AMD increases the value of AMD.

There are a host of different hypothesis you could pose to explain that. Maybe OpenAI has some secret sauce they'll share with AMD now that they have a stake. Maybe OpenAI will be more likely to buy from AMD in the future. Maybe AMD can use the experience they get serving OpenAI to better their products. Heck, maybe OpenAI will pump the stock by having Sam Altman talk about it on some podcasts.

It's impossible to disentangle all of those theories, because different investors will have different beliefs and you only get an aggregate.

[lucianbr]

Thanks for explaining.

Imho AMD itself needs to have a theory, which underpins their signing of the deal. For my clueless self, that investors have various theories and we don't know what they are is ok-ish, but that AMD has a theory but keeps it secret yet it gets the result of stock rise... is fishy.

Everyone is going in circles making suppositions and estimations based on who knows what. That can't be healty, can it? There used to be requirements that publicly listed companies act with some level of transparency, and those requirements existed for a reason. I guess. I am certainly no expert in finance.

[delusional]

> but that AMD has a theory but keeps it secret yet it gets the result of stock rise... is fishy.

It's not secret at all. Companies announcing a deal like this usually include some PR material alongside it [1]. In this one, the quote is:

    “Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” said Jean Hu, EVP, CFO and treasurer, AMD. “This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD's non-GAAP earnings-per-share.”

"significant strategic alignment", "shareholder value", and "billions of dollars in revenue" are all things that should be expected to move the market cap. The "tens of billions in revenue" would generate upwards of 100 billion in market cap alone, assuming AMD's current multiple.

[1]: https://www.amd.com/en/newsroom/press-releases/2025-10-6-amd...

[didibus]

I think the idea is that, OpenAI using AMD GPUs will help AMD become competitive against Nvidia in the AI space. If OpenAI is able to use them for their models, other companies will see AMD as a legitimate option and might switch to AMD for GPUs as well.

This would be where AMD is to gain new money.

OpenAI also has to gain, if it means access to more GPUs allows it to compete and be the winner of the LLM race. As the winner of the race, it would make new money, but also likely need to spend even more money on AMD to buy even more GPUs for years to come.

[Jlagreen]

AMD was desperate enough to sell 10% of their company to get 1 customer.

The issue here is now, that every large customer of AMD will now probably ask for equity. AMD has put itself into a pit hole with that deal.

If I were Hyperscaler CEO, I would basically ask for the a similiar deal as OpenAI or no business. Sorry Lisa Su but as a CEO giving equity to a customer is an absolute red flag because it starts a negative spirale you can't stop.

It seems that no matter the discount, OpenAI wasn't ready to make deal without equity. This tells you exactly how AMD is seen in the AI world.

OpenAI will take the compute for free and help AMD to rise stock value but it won't help AMD one bit because if AMD remains in the current position then OpenAI and Hyperscalers can get great deals with equity from AMD. The incentive isn't now to improve AMD to be competitive but to squeeze everything out of a company being desperate enough to give equity to customers.

And AMD will feel this. Nvidia will remain dominant because of ecosystem and supply. AMD can't easily replace Nvidia in supply chain and Nvidia is already strongly entrenched in many AI compute operations. And on the other side Hyperscalers are focused on their own chips (even OpenAI LOL) so they will tell AMD "Give us equity or no deal". This deal might be really the worst AMD deal yet because AMD is telling the world "here, you can get free AI compute from us financed by our equity". And while it might push AMD share price the very share price will drop 80-90% like any other one in case of an AI bubble pop.

[jerf]

You have put your finger on the AI bubble's biggest problem right now. Companies are making promises that they are currently completely incapable of fulfilling, in the hopes that someday they can, and the stock market are valuating these promises as done deals.

Predicting the end of bubbles is well known to be a fool's errand, but if this AI bubble is still going in a year I can only imagine how casually these companies will have to be throwing around multi-trillion dollar promises to each other to keep the stocks pumped up.

[chasd00]

> Companies are making promises that they are currently completely incapable of fulfilling, in the hopes that someday they can, and the stock market are valuating these promises as done deals.

That reminds me a lot of Enron. As long as the stock keeps going up everything is fine but when it does t everything comes crashing down.

[wmf]

Market validation I guess.

[SirMaster]

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]

My uneducated one word answer: CUDA.

[preisschild]

Could quickly change if open alternatives were suddenly more popular or with stuff like ZLUDA

https://github.com/vosen/ZLUDA

[alwahi]

if your castle had a moat like CUDA....

[jakogut]

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.

[CuriouslyC]

CUDA isn't even a moat for inference, only for training.

[resters]

There is not. AMD didn't invest in tooling and interconnect technology the way Nvidia has, probably because of antitrust fears (or maybe mismanagement). But in terms of core GPU technology and fab, AMD is close to being a peer.

I've been saying this for several years now and it seems that someone finally listened :)

[blihp]

Try to use AMD GPU's for AI and you'll understand. Unless you have lots of your own engineers to throw at making their stuff work, it's easier for most companies just to keep throwing money nVidia's way.

[SirMaster]

I understand that it's that way today. But I am talking about "potential". If OpenAI and AMD engineers get their heads together and make some new software etc, couldn't AMD in theory become as valuable as Nvidia or at least half as valuable?

It seems like to take a 350M market cap company to 2B+ or a 6x+ increase in stock price would be worth doing for a few hundred million dollar investment in software and such?

[blihp]

By the time that could feasibly come to fruition, I suspect the AI bubble will have long since popped. Despite making decent GPUs for graphics, AMD can't seem to get its act together on the GPU compute front.

[lacker]

> Sam is spinning the world on his finger tip with these deals he's crafting.

That was my reaction too, this sort of weird deal seems very Sam Altman style.

Like Elon Musk - ironically, the archenemies are very stylistically similar.