alt Hacker NewsFor an interesting interpretation of the recent AMD-OpenAI deal, see Matt Levine's column from a few days ago:
> OpenAI: We would like six gigawatts worth of your chips to do inference.
> AMD: Terrific. That will be $78 billion. How would you like to pay?
> OpenAI: Well, we were thinking that we would announce the deal, and that would add $78 billion to the value of your company, which should cover it.
> AMD: …
> OpenAI: …
> AMD: No I’m pretty sure you have to pay for the chips.
> OpenAI: Why?
> AMD: I dunno, just seems wrong not to.
> OpenAI: Okay. Why don’t we pay you cash for the value of the chips, and you give us back stock, and when we announce the deal the stock will go up and we’ll get our $78 billion back.
> AMD: Yeah I guess that works though I feel like we should get some of the value?
> OpenAI: Okay you can have half. You give us stock worth like $35 billion and you keep the rest.
https://www.bloomberg.com/opinion/newsletters/2025-10-06/ope...
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Levine is fantastic on all sorts of bizarre financial dealings. Money Stuff is such a good daily read even though I don't work in a financial job
There's no way someone would be stupid enough to part with $x worth of product and $ 0.5 x worth of stock in exchange for $x, is there? Honestly, it's stupid to even make such an offer. What prevents AMD from turning it around on them?
> AMD: Oh, since you put it like that, why don't you pay us $x for the chips and give us $ 0.5 x worth of stock? When your market cap rises by $ 0.5 x you'll get the money for those stocks. And hell, it might even rise further, giving you back some of the money for those chips. You're really robbing me blind with this deal, you'd be a fool not to take it!
Does he explain why the valuation of the company would go up by $78 billion on the public news that AMD agreed to give $78 billion of goods to OpenAI for free?
Oh this just seems like the typical financial dealings that City of London invented to obfuscating ownership of holdings half millennium ago. Some would event argue this obfuscation what transferred power from the military to bankers. And it is how we end up in this transnational corporation where the public really have no idea who is owning what and who is actually running the show here.
Now we are just transferring the power from bankers -> tech/AI.
This reminds me of the AOL Time Warner merger. "Back in the day", America Online (AOL) had a valuation large enough to pull it off:
It was the largest merger in history when completed with
the combined value of the companies at $360 billion.[0]
0 - https://en.wikipedia.org/wiki/AOL#2000%E2%80%932008:_As_AOL_...
It’s just AMD levering up on its on stock. Similar to MSTR. AMD is taking a loan against its own shares to build gpu’s hoping to rent them out via OpenAI in the future. No point in betting against it, because it can’t get margin called until OpenAI goes bankrupt. Which isn’t happening until OpenAI is worth $10 trillion first.
From the OpenAI side, it’s an amazing deal. $35B profit in one day… at a pe of 30, it’s already worth a trillion if it can repeat similar deals every year.
Discussed yesterday:
OpenAI is good at deals - https://news.ycombinator.com/item?id=45493815 (40 comments)