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.
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.