Wall Street analysts explain how AMD’s own stock will pay for OpenAI’s billions in chip purchases 

After the AMD and OpenAI announced Monday stretching partnershipThe Chatter It was immediately an unusual way that the Open would pay for his AMD purchase. To do this it will use AMD’s own stock.

To retrieve: OPNA AMD NVIDIA has agreed to refine the line of competitive chips, instinct GPUs and to help purchase and establish 6 gigawatts from AMD for multiple years. AMD says the value of this agreement is billions.

But Open is not paying for it beyond its own revenue. Instead, a boat in the stock warrant has granted the AMD Opena – 160 million AMD share – which will vest on the trails because of the specific milestone. These milestones include specific growth of stock prices, up to $ 600 million with the latest tranches dependent on AMD shares, AMD publishingThe They were trading at about $ 165 before the news hit and the announcement increased to $ 214 in the nearby market on Monday.

If the share price hit its signs and OpenAI earns all the contributions he needs and does not sell all the shares of the AMD, without selling it in any way, OpenAI can make enough AMD stock to pay for many GPUs. The stock can be worth about 100 billion dollars.

“We need ~ 1T Market Cap need to vest the final 6th to the final 6th tranch – Ego, if the OAI holds the stock to hold the stock, it will be worth ~ 100b,”, “UBS analyst Timothy Arcuri wrote on Tuesday.

However, Arkuri believes that the more possible scene is that Open is on the way to pay his AMD bill on his AMD stock. So, basically, it is a scheme for AMD to finance this customer’s purchase.

Nevertheless, Arcuri argues that AMD’s AI GPUs can handle openAI workloads, and any other AI work pressure is valuable for AMD to create this financing gamble. “Customer dialogues out of the AMD Open are highlighted and hope this agreement will ultimately accelerate the acceleration of AMD,” he wrote. Specifically, the stamp of the Openai approval gives it one to sell its GPUs to many cloud service suppliers that already provided with the CPUs.

So in the long run, those who truly pay for the purchase of the giant AMD GPUs in the Openai will be the retail and intuitive investors if they really bid the share price.

NVEDIA OPENAI OPENY OWN OPENDIA OWNING OPENDING PURCHASE PURCHASE Announced last monthThe Of course the difference is that multiple investments in OpenAI have given Nvidia a portion of the fast-growing AI supplier a portion, not in other way.

But what was the choice of AMD? By financially engineering on an agreement that costs a little of the opening, it gets a significant step – as much as 30% of the marketshare, USB estimates – one turns into one The largest build out The world has ever seen in the next generation’s data centers.

Although Arcury admits that AMD’s deal is “reasonably less attractive” than Nvidia “,” we see it as a major validity of it [AMD’s] Roadmaps that can snow to other customers. ”