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.
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 doesn’t need to, but it’s clearly chosen to.
I mean, the Trump Administration is willing to give Meta and Alphabet their own company towns, excuse me, special economic zones, where the only laws and regulations are what the corporation wants. SpaceX already has one in Texas.
Conversely, I’m confident that if Democrats take back power they’re going to open all sorts of investigations against Musk and his cohorts. And Musk and his cohorts know it too.
I don’t think there’s any putting the bipartisan technocrat consensus back together. American tech companies have pretty solidly aligned themselves with Republican authoritarianism.
The tech-oligarchs just follow whoever is in power. They’ll switch back if there is a power change, and the Dems will welcome their money. This is the way.
The Dems will fight to subsidize health insurance companies more, and some other minor efforts - but there is nothing to suggest that they will pursue justice anywhere for acts during Trump’s reign.
I try to keep the hyperbole down unless I’m joking, but this smells like Great Depression 2.0. The stock market is way overinflated, in the tech sector anyway. Imagine how much money is out there vs. the true value of these companies. When it all starts to tilt, investors will panic and pull the plug.
On top of the Wall Street angle, we again have the economic imbalance of the Gilded Age, a world war ramping us, labor gains rolled back, and fascism on the rise as an answer.
It’s just so weird and stupid that the main driving force of the whole thing on the surface seems to be a chatbot. Just… so mundane.
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 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.
So basically another Nvidia, Oracle and OpenAI money loop to inflate shares to make things look good but adding no actual value since the money just goes back to where it came from.
South Seas Bubble ass situation. Can’t wait for it to all collapse and tank all the companies involved into hell.
About everyone who was alive in October of 1929 is dead and the rest of us appear to have forgotten.
Common, they’re surely too big to fail 😎🤑🤑🤑
Right?
Maybe. The US government has allowed gigantic mergers and acquisitions for so long that, yes, some companies can’t go down without fucking up the whole economy.
Right, and that begs the questions, “What do you mean by ‘economy’?” and correspondingly, “Does it make our lives worse if the billionaires have to buy smaller yachts?”
Cuz I never once got a raise when the economy was booming. Somehow it never seems to hook me up. Strange, isn’t it?
Griftin’ aint EZ
It’s one GPU Michael. What could it cost? $600?
The Marshal plan, for tech bros! What could go wrong?
