Or you know, buy the chips fair and square, buy the stock fair and square, provide a service that’s worth something, and make profit from both transactions.
It is way more work to provide value than it is to bribe the regulators to agree that you provided value.
Isn’t this basically a kind of insider trading? They wouldn’t be allowed to buy that stock, knowing that this deal is about to happen, but receiving it as part of the deal is okay? That doesn’t feel right to me.
The rules about insider trading only exist to make poor people feel better.
Nah, they are rich so it should be fine.
Any deal involving whole percentages of stock will affect the stock price, it’s insider trading when you get a call from someone at AMD before the deal is public, so you can profit. It’s not insider trading for AMD executives to exercise their stock options (which they already had) to profit from the stock movement they just authorised
You also have the circular investment. NVIDIA puts money into OpenAI. It uses that money to buy computing power from Oracle, who then fills its datacenters with hardware from NVIDIA. Everybody’s valuation rises.
Edit: valuation, not validation
Insert 2 economists eating shit joke
So basically they’re paying in exposure.
There’s a mildly amusing bit in there about disrespecting artists and not wanting to pay them money for their work that I’m not a good enough writer to execute (guess I should’ve asked chatgpt to do that for me and posted the result as my own original work do not steal instead of this nonsense ramble).
If they say they are gong to pay artists the stock will not go up
You’re paid in exposure.
AMD too?
So, assuming that Intel is also on the wrong side of history as usual (and that their cards are actually good for gaming, of which I’m not convinced) , you literally can’t buy a decent gaming GPU without paying into the AI nonsense?
Look, the recent CPU lineup had AI in its name, has dedicated cores in it. Because Windows wants to do AI things or whatever.
its
Intels main focus with their GPUs has been AI workloads. I have an Arc A770 I don’t use because while it works great for LLMs and shit, it doesn’t run the games I want it for. 🙃
NVIDIA’s deal makes much more sense. Will use OpenAI revenue to buy shares in OpenAI and still profit if OpenAI goes bankrupt.
This is less a “vote of confidence” in AMD, because shit is free for OpenAI here. I too will buy all the AMD GPUs if you give me AMD stock of same or greater value. This deal structure actually makes AMD look terrible and unconfident in its product. But deal is not transparent enough.
Is this really what happen?
Pretty much. OpenAI will “give” AMD 78bln for 10% of the stock and the chips openAI actually wants. This whole ordeal has been publicly paraded like OpenAI and AMD partnering up, which has already pumped up AMD stock price by 45%. Thus openAI will eventually get their 78bln (which they actually never had in the first place) back in AMD stock.
So who actually pays the 78bln? The simple answer is AMD stock holders, currently the ones who have bought the stock after the announcement and later the ones who bought it before it crashed. The more complex answer is that the stock market at this point is just a speculative mess where numbers are made up because the price isn’t dictated by what the company is currently capable of doing but rather what the company potentially could be doing in the future. Who knows who is actually paying for it because AMD stocks will get used elsewhere (for example as collateral in a loan) and the economic growth with absorb the costs. In short, we might as well imagine nobody paid for the chips.
In short, brace for another “once in a lifetime” economic crash.
The more complex answer is that the stock market at this point is just a speculative mess where numbers are made up because the price isn’t dictated by what the company is currently capable of doing but rather what the company potentially could be doing in the future
The stock market has been a speculative mess where the numbers are made up during my entire lifetime.
Cui bono? The executives who approved the deal will make bank on their stock options
It’s never good for a company to have unprofitable decisions made by people for whom the decision is profitable
The more complex answer is that the stock market at this point is just a speculative mess where numbers are made up because the price isn’t dictated by what the company is currently capable of doing but rather what the company potentially could be doing in thue future.
You seem to be under the impression it was ever anything else.
I’m already too cynical, let me be naive about some things.
Also, make sure to keep secret the actual milestones and share allocations being gifted to OpenAI.
MI450s are expected to be $40k/kw. 6gw would be $240B in revenue. AMD can make MI450 an openAI only product and overcharge them for it. MI451 for everyone else. If price is fixed, MI450 is not finalized, afaik, and so much lower specs than promised/theorized could be delivered, with again MI451, the original hoped design.
The amount of fuckery is too damn high, but future fuckery too damn exponentiallydamn high.
Do they actually use KW as a measure in these circumstances? Might as well add the equivalent to resistance heating strips in their chips.
All of these datacenter deals are announced in GW. not in gpu units or gpu maker revenue. It’s part of the fuckery in deal disclosure, as definitely the GPU provider DGAFs about any of our power problems, and certainly some price per GPU is what they negotiate on.
Was this a real conversation? Jeez lol
Matt Levine is a wall Street lawyer who now does opinion pieces for Bloomberg, usually pretty informative and well written. Here’s the full piece
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Is that perfectly acceptable or does that count as some sort of insider trading?
Infuriatingly, it’s yes to both, when you define “perfectly acceptable” from the viewpoint of the kakistocracy now in charge of preventing and punishing such things.
If it looks like inflating the bubble, walks like bubble and quack like bubble…
