Wall Street Analysts Explain How AMD’s Own Stock Will Pay For OpenAI’s Billions In Chip Purchases
After AMD and OpenAI announced an expanded partnership on Monday, Wall Street analysts explained how AMD’s own stock will pay for OpenAI’s billions in chip purchases, sparking intense discussion across the tech and finance world.
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Instead of paying in cash, OpenAI will use AMD’s stock to fund its purchase of AMD’s Instinct GPUs, a key rival to Nvidia’s chips. The deal involves OpenAI helping AMD refine these chips while also deploying up to 6 gigawatts of compute capacity over several years — a deal worth billions in revenue for AMD.
How OpenAI Plans To Pay AMD Using AMD’s Own Stock
Here’s where things get interesting: OpenAI isn’t paying for the GPUs directly. Instead, AMD has granted OpenAI up to 160 million stock warrants, which will vest in tranches as certain performance and market milestones are achieved.
One of those milestones? AMD’s stock soaring to $600 per share. Before the announcement, AMD was trading around $165, but it quickly jumped to $214 by market close after the news broke — signaling investor excitement.
If AMD’s stock keeps climbing and all milestones are met, OpenAI’s potential stake could reach a value of about $100 billion.
Analysts See A Bold Financial Play By AMD
According to UBS analyst Timothy Arcuri, the structure of this deal essentially allows AMD to finance OpenAI’s chip purchases through its own stock.
“We would note that the final 6th tranche requires a ~$1 trillion market cap to vest — ergo, if OpenAI were to hold stock until the end of the deal, its stake would be worth ~$100 billion,” Arcuri wrote in a research note.
However, Arcuri believes OpenAI will likely sell portions of its AMD stock along the way to fund its GPU orders, making this a clever — though unconventional — financing mechanism.
Why AMD Thinks The Risk Is Worth It
Despite the financial complexity, analysts argue that the strategic value for AMD could outweigh the risks. By validating that AMD’s AI GPUs can handle OpenAI’s demanding workloads, the company gains crucial credibility in the AI race.
“AMD highlighted ongoing customer dialogs beyond OpenAI and expects this agreement to ultimately accelerate AMD adoption momentum,” Arcuri added.
With OpenAI’s endorsement, AMD now has a powerful proof point to market its GPUs to major cloud service providers and enterprise customers — the same partners that already rely on AMD CPUs.
The Real Paymasters: Retail And Institutional Investors
In the long run, Wall Street analysts explain how AMD’s own stock will pay for OpenAI’s billions in chip purchases, but that also means the real financial weight may fall on AMD’s shareholders.
If the stock continues to rise and vesting conditions are met, retail and institutional investors effectively become the ones funding OpenAI’s massive AI infrastructure bet.
Still, many see this as a win-win scenario: AMD gains market momentum and visibility, while OpenAI secures critical compute power to fuel its next generation of AI models — all without upfront cash.
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