AMD CEO Lisa Su has granted OpenAI warrants to purchase 10% of AMD stock, given certain purchasing and stock performance obligations. Sam Altman will be able to purchase millions of AMD shares for a single penny.
https://www.sec.gov/ix?doc=/Archives/edgar/...
The way the deal works is in tranches. For example for the first tranche, AMD must deliver (and OpenAI must purchase) 1 gigawatt's worth of GPUs. This obviously only works if Altman can actually find the money to make the purchase. Further tranches are "subject to achievement of specified Company stock price targets that escalate to $600 per share for the final tranche and stock performance threshold".
This is just vendor financing, but instead of directly handing cash to OpenAI, the payment is in stock. OpenAI just needs to borrow money from someone else (likely Nvidia), make the purchase, buy the stock, stock goes up, and presumably OpenAI can then cash out. Free GPUs curtesy of AMD shareholders, who pay through the dilution of their AMD shares.
Wolfy9 hours ago
To be fair if $AMD does rise up because of the deal, existing shareholders are welcome to sell and take profits. The shares do not get diluted for the later tranches if the stock performance obligations are not met.
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AMD CEO Lisa Su has granted OpenAI warrants to purchase 10% of AMD stock, given certain purchasing and stock performance obligations. Sam Altman will be able to purchase millions of AMD shares for a single penny. https://www.sec.gov/ix?doc=/Archives/edgar/... The way the deal works is in tranches. For example for the first tranche, AMD must deliver (and OpenAI must purchase) 1 gigawatt's worth of GPUs. This obviously only works if Altman can actually find the money to make the purchase. Further tranches are "subject to achievement of specified Company stock price targets that escalate to $600 per share for the final tranche and stock performance threshold". This is just vendor financing, but instead of directly handing cash to OpenAI, the payment is in stock. OpenAI just needs to borrow money from someone else (likely Nvidia), make the purchase, buy the stock, stock goes up, and presumably OpenAI can then cash out. Free GPUs curtesy of AMD shareholders, who pay through the dilution of their AMD shares.
To be fair if $AMD does rise up because of the deal, existing shareholders are welcome to sell and take profits. The shares do not get diluted for the later tranches if the stock performance obligations are not met.
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