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After AMD and OpenAI announced an\u00a0expanded partnership on Monday<\/a>,\u00a0the\u00a0chatter<\/a>\u00a0immediately\u00a0turned\u00a0to\u00a0the unusual way OpenAI would pay for its AMD purchases. It will use AMD\u2019s own stock to do so.\u00a0<\/p>\n To recap:\u00a0OpenAI\u00a0has agreed to\u00a0help AMD refine its line of Nvidia competitor\u00a0chips,\u00a0the\u00a0Instinct GPUs, as well as to\u00a0purchase\u00a0and deploy 6 gigawatts of\u00a0compute\u00a0capacity from AMD over multiple years.\u00a0AMD said this deal is worth billions in revenue.\u00a0<\/p>\n But OpenAI\u00a0isn\u2019t\u00a0paying for this out of\u00a0its\u00a0own revenues.\u00a0Instead\u00a0AMD has granted OpenAI a boatload of stock\u00a0warrants\u00a0\u2014\u00a0up to 160 million AMD shares\u00a0\u2014\u00a0which will vest\u00a0in tranches\u00a0as certain milestones are achieved. Those milestones include\u00a0specific\u00a0increases in the stock price, with the last tranche dependent on AMD shares soaring to $600 million apiece, AMD disclosed<\/a>. They were trading at\u00a0about $165 before the news\u00a0hit and\u00a0soared to $214 by\u00a0market close\u00a0Monday\u00a0after the announcement.\u00a0\u00a0<\/p>\n If the stock price hits its marks, and OpenAI achieves all its required contributions, and OpenAI holds all of AMD\u2019s\u00a0shares, not selling any along the way,\u00a0OpenAI may make enough on AMD stock to pay for a lot of GPUs.\u00a0The stock could be worth\u00a0about a $100 billion.\u00a0\u00a0<\/p>\n \u201cWe would note that\u00a0the final 6th tranche requires ~$1T market cap to vest \u2013 ergo, if OAI were to hold\u00a0stock until the end of the deal, its stake would be worth ~$100B,\u201d writes UBS analyst Timothy Arcuri in a research note on Tuesday.\u00a0\u00a0<\/p>\n But Arcuri believes that a more likely scenario is that OpenAI will sell its AMD stock\u00a0along the\u00a0way\u00a0to pay its AMD bill.\u00a0So, essentially, this is a scheme for AMD to\u00a0finance this customer\u2019s purchases.\u00a0\u00a0<\/p>\n Still, Arcuri argues,\u00a0the validation that AMD\u2019s AI GPUs can handle OpenAI workloads, and ergo any other AI workloads, is valuable enough for AMD to make this financing gambit.\u00a0\u201cAMD highlighted ongoing customer dialogs beyond OpenAI and expects this agreement to\u00a0ultimately accelerate\u00a0AMD adoption momentum,\u201d he writes.\u00a0In particular, OpenAI\u2019s\u00a0stamp of approval gives it an in to sell\u00a0its GPUs\u00a0to\u00a0the\u00a0many cloud service providers it already provides with CPUs.\u00a0\u00a0<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco<\/span> So\u00a0in the long run, the ones who will truly be paying for OpenAI\u2019s giant multi-year purchase of AMD GPUs will be retail and\u00a0intuitional\u00a0investors\u00a0if they do indeed\u00a0bid the stock price up.\u00a0<\/p>\n In many ways Nvidia is also financing OpenAI\u2019s purchases of Nvidia\u2019s wares with\u00a0its\u00a0own\u00a0$100 billion\u00a0investment\u00a0announced last month<\/a>. The difference, of course, is that\u00a0Nvidia\u2019s\u00a0multiple\u00a0investments\u00a0in OpenAI\u00a0has granted Nvidia a\u00a0stake in the fast-growing AI provider, not the other way around.\u00a0<\/p>\n But what choice did AMD have? By financially engineering\u00a0a deal that costs OpenAI little,\u00a0it gets\u00a0a\u00a0significant\u00a0foothold\u00a0\u2014 as much as 30%\u00a0marketshare,\u00a0USB estimates\u00a0\u2014\u00a0into one of the biggest\u00a0build-outs<\/a>\u00a0of next-generation data centers the world has ever seen.\u00a0\u00a0<\/p>\n While Arcuri admits that AMD\u2019s deal is \u201carguably less attractive\u201d than Nvidia\u2019s, \u201cwe see this as a major validation of its\u00a0[AMD\u2019s] roadmap that could snowball to other customers.\u201d\u00a0<\/p>\n<\/div>\n
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\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 27-29, 2025<\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n