undefined | Better HN

0 pointsAlanYx5mo ago0 comments

>Couldn't they just buy the AMD chips if they're good enough?

OpenAI would presumably need to raise money to buy the AMD chips.

The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI. Then OpenAI will presumably turn around and sell those shares (or borrow against them) to raise enough money to purchase the AMD GPUs.

0 comments

Aurornis5mo ago

> The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI.

There's no giving away of anything in the deal. The $0.01 per share price is only available if they purchase the GPUs.

It's more like one of those "free with purchase" deals where you're still paying for the product, but they throw in something to sweeten the deal.

They're not actually getting AMD shares at $0.01 each with no strings attached like many of the comments are assuming.

kalap_ur5mo ago

They sign the purchase order on 1/1/26. AMD issues invoice to be paid in 30 days, that is 2/1/26. OpenAI triggers warrant and informs AMD on 1/2/26. OpenAI receives shares on 1/4/26. On 1/5/26 OpenAI and AMD announce the GPU purchase deal. On 1/30/26 OpenAI sells its shares in AMD. From proceeds, OpenAI pays AMD on 2/1/26. Thus, AMD financed OpenAI's GPU purchase via AMD's shares.

Keyframe5mo ago

translated, AMD buys GPU from itself and gives them to OpenAI for free. OpenAI gets GPUs for free, AMD hopes the market will reward the deal enough to increase its valuation by more than the dilution cost.

I have to ask - is this even legal? I understand it can be, but somehow it feels wrong. I guess AMD would report revenue of those GPU sale and equity issuance / dilution as part of payment terms, and OpenAI would record hardware purchase expense as well as investment income or maybe capital gain when selling those shares. What makes it legal is probably it all needs to be transparently communicated in time?

munksbeer5mo ago

The rest of the world trying to decipher this post because of the date format :headscratch:

1 more reply

AlanYxOP5mo ago

Yes, I was being somewhat flippant in my description of the transaction. But the net result of the transaction is the same. OpenAI can finance the GPU purchases by borrowing against the contractual guarantees it received from AMD to receive warrants in exchange for acquiring AMD GPUs. Whether the transaction is partially or entirely financed will depend on AMD's share price movement in the interim.

DebtDeflation5mo ago

It's just round tripping with an extra step or two. AMD giving OpenAI money (via stock options) that they can use to buy AMD chips.

lotsofpulp5mo ago

That “just” is doing a lot of work equivocating stock options with money.

If that were true, there would never be any business that failed.

formerly_proven5mo ago

These are options with a 99.995% discount (as of this writing) on AMD stock.

zerosizedweasle5mo ago

It's circular money flows.

1 more reply

Pet_Ant5mo ago

It seems to me that there is an aspect of marketing to this deal. Nvidia has the mindshare, so this would help legitimise AMD offerings. This is almost product placement/sponsorship for AMD.

Also, this would battle test AMD's platform and provide enhancements so it's also a beta-testing service.

rhetocj235mo ago

Financing made out of thin air. Hilarious

lesuorac5mo ago

Not thin air.

Existing AMD shareholders will have their holding diluted.

Or assuming banks loan them money, if say OpenAI goes under then the banks just lose that money.

wmf5mo ago

When the stock goes from $150 to $600 that's not called dilution. Nobody cares about the number of shares in that situation.

1 more reply

zerosizedweasle5mo ago

It's a joke that it is so obvious what they are doing.

j / k navigate · click thread line to collapse

0 comments

Aurornis5mo ago

> The "genius" of this deal is that AMD is "giving away" 10% of the company (at $0.01/share) to OpenAI.

There's no giving away of anything in the deal. The $0.01 per share price is only available if they purchase the GPUs.

It's more like one of those "free with purchase" deals where you're still paying for the product, but they throw in something to sweeten the deal.

They're not actually getting AMD shares at $0.01 each with no strings attached like many of the comments are assuming.

kalap_ur5mo ago

Keyframe5mo ago

munksbeer5mo ago

The rest of the world trying to decipher this post because of the date format :headscratch:

1 more reply

AlanYxOP5mo ago

DebtDeflation5mo ago

It's just round tripping with an extra step or two. AMD giving OpenAI money (via stock options) that they can use to buy AMD chips.

lotsofpulp5mo ago

That “just” is doing a lot of work equivocating stock options with money.

If that were true, there would never be any business that failed.

formerly_proven5mo ago

These are options with a 99.995% discount (as of this writing) on AMD stock.

zerosizedweasle5mo ago

It's circular money flows.

1 more reply

Pet_Ant5mo ago

It seems to me that there is an aspect of marketing to this deal. Nvidia has the mindshare, so this would help legitimise AMD offerings. This is almost product placement/sponsorship for AMD.

Also, this would battle test AMD's platform and provide enhancements so it's also a beta-testing service.

rhetocj235mo ago

Financing made out of thin air. Hilarious

lesuorac5mo ago

Not thin air.

Existing AMD shareholders will have their holding diluted.

Or assuming banks loan them money, if say OpenAI goes under then the banks just lose that money.

wmf5mo ago

When the stock goes from $150 to $600 that's not called dilution. Nobody cares about the number of shares in that situation.

1 more reply

zerosizedweasle5mo ago

It's a joke that it is so obvious what they are doing.

j / k navigate · click thread line to collapse