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.
It’s an incredible house of cards, and I’m honestly coming to suspect that’s the point. These companies have some of the greatest financial experts in the world working for them. They can’t possibly not know how fucked they are in the long run.
But the long run is the long run. I’m confident Trump and his billionaire tech bro lackeys can pump enough money and silence enough regulators to keep the bubble afloat until 2029.
If Democrats take power in 2029, or if Democrats take the House in 2027 and start doing something effective (lol), then the tech bros pull the plug, blame liberals and illegals for crashing the economy, and guide the predictable conservative / authoritarian backlash to their benefit.
Yay, technofeudalism.
The government shutdown might pop the bubble early.
US Dems are as pro AI as the Republicans. Big tech doesn’t need to stay on one side.
It doesn’t need to, but it’s clearly chosen to.
I mean, the Trump Administration is willing to give Meta and Alphabet their own company towns, excuse me, special economic zones, where the only laws and regulations are what the corporation wants. SpaceX already has one in Texas.
Conversely, I’m confident that if Democrats take back power they’re going to open all sorts of investigations against Musk and his cohorts. And Musk and his cohorts know it too.
I don’t think there’s any putting the bipartisan technocrat consensus back together. American tech companies have pretty solidly aligned themselves with Republican authoritarianism.
The tech-oligarchs just follow whoever is in power. They’ll switch back if there is a power change, and the Dems will welcome their money. This is the way.
The Dems will fight to subsidize health insurance companies more, and some other minor efforts - but there is nothing to suggest that they will pursue justice anywhere for acts during Trump’s reign.