TMTB Morning Wrap

Just another boring morning in Tech lol.

Huge announcement this morning from OpenAI / AMD.

Here’s Bloomberg:

Bloomberg:

Advanced Micro Devices Inc. inked a deal with OpenAI to roll out AI infrastructure in a pact the chipmaker said could generate tens of billions of dollars in new revenue. AMD’s shares soared.

The two signed a definitive agreement for OpenAI to deploy 6 gigawatts of AMD GPUs over multiple years, the companies said Monday in a statement. AMD has given OpenAI a warrant for up to 160 million shares, which will vest as milestones are achieved.

“Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI’s AI infrastructure buildout,” AMD Chief Financial Officer Jean Hu said in a statement.

AMD and OpenAI said the first tranche of warrants will vest when the first gigawatt of computing is deployed, a build which will start in the second half of next year.

From Reuters: “AMD executives expect the deal to net tens of billions of dollars in annual revenue. Because of the ripple effect of the agreement, AMD expects to receive more than $100 billion in new revenue over four years from OpenAI and other customers, they said.”

Here’s a rough cut at the math and what we think AMD could be worth post this deal (h/t TMTB readers in the chat for help w the math):