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by jpadkins 251 days ago
specifically, it's coming from new AMD stock holders that are buying shares at much higher than current prices. And those shareholders are buying a company that they value more because AMD is better positioned in the LLM market because of the side effects of the OpenAI integration.

Existing AMD shareholders are getting a great deal; their shares are worth 30% more today and will be worth 5X more if OpenAI gets to use their option. Yes, there is some dilution for existing shareholders, but only after a 5X gain.

OpenAI basically self financed the buying of tens of billions of dollars of GPUs by increasing the enterprise value of AMD, and taking a cut of that. And the increase in value is not just the announcement, but the integration work needed to make AMD GPUs as good as Nvidia for inference.
2 comments
diamond559 251 days ago
They are getting a meaningless deal unless they can nearly triple their market value from here. Sam isn't buying AMD shares for more than a penny, what should we value it at?
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jpadkins 250 days ago
Sam doesn't get to buy AMD shares for a penny unless it reaches a certain threshold (not sure if those details are public, but I read 3-5X last week's price in these threads). It's common in these deals to have these thresholds for options.
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doodlebugging 251 days ago
>Existing AMD shareholders are getting a great deal; their shares are worth 30% more today and will be worth 5X more if OpenAI gets to use their option. Yes, there is some dilution for existing shareholders, but only after a 5X gain.

So if I read this right then an existing shareholder benefits up to the point where AMD stock reaches the $600/shr level and after that it becomes a dilution.

For the maximum benefit to existing shareholders, the stock price must get near $600/shr and if that looks unlikely they should consider other investments on less speculative terms. This whole AI thing feels like I'm watching the soapy fluid flow along the bubble exterior to form a droplet of soap on the bottom, thinning and weakening the bubble until it pops due to fluid film rupture at the top of the bubble as the droplet leaks away due to gravity.

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