AMD and OpenAI recently announced an expanded partnership, generating buzz over OpenAI’s unique payment method: AMD stock. OpenAI will assist AMD in enhancing its Instinct GPUs, purchasing 6 gigawatts of compute capacity over several years, a deal estimated to bring billions in revenue to AMD. Instead of cash, OpenAI will pay with stock warrants for up to 160 million AMD shares, which will vest upon achieving certain milestones, including a projected spike in AMD’s stock price to $600. UBS analyst Timothy Arcuri suggests OpenAI might sell shares along the way to finance GPU purchases, essentially making this a financing strategy for AMD. The collaboration not only reaffirms the capabilities of AMD’s AI GPUs but also enhances AMD’s market presence, particularly among cloud service providers. Ultimately, retail and institutional investors would bear the cost through stock price increases, contrasting with Nvidia’s direct ownership stake in OpenAI through its substantial investment.
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