Nvidia CEO Jensen Huang expressed surprise over Advanced Micro Devices’ (AMD) recent decision to offer 10% of its shares to OpenAI. This offer is part of a significant partnership announced earlier this week. Huang described AMD’s move as “imaginative” and “unique,” highlighting the unexpected nature of the agreement.
Details of the AMD and OpenAI Deal
On Monday, OpenAI agreed to purchase 6 gigawatts of chips over several years, which includes the upcoming MI450 series from AMD. The partnership involves OpenAI receiving warrants for up to 160 million shares of AMD. These warrants will be vested based on specific milestones tied to deployment volume and AMD’s stock price.
- If OpenAI fully exercises this warrant, it could end up with a roughly 10% ownership stake in AMD.
- AMD’s stock saw an increase of 11% following the announcement and has surged 43% throughout the week.
- Nvidia’s shares rose by 2% on the same day after Huang’s comments.
Impact on the AI Chip Market
This new deal presents a challenge to Nvidia’s established dominance in the AI chip sector, particularly as AMD strives to enhance its competitive edge. The agreement also highlights AMD’s collaboration with cloud providers developing their own chips.
Nvidia’s Investment in OpenAI
In late September, Nvidia revealed plans to invest up to $100 billion in OpenAI over the next decade. This investment aims to expand the partnership, with OpenAI expected to implement Nvidia systems requiring 10 gigawatts of power, equating to approximately 4 to 5 million GPUs.
Funding Concerns
While discussing financial strategies, Huang mentioned that OpenAI currently lacks the necessary funds to execute its agreement with Nvidia. He stated that OpenAI must consider raising money through its growing revenues, as well as equity or debt options.
Involvement with Other AI Initiatives
Huang also confirmed Nvidia’s participation in xAI’s current funding round, where Elon Musk’s AI startup aims to raise about $20 billion. Reports indicate that Nvidia plans to contribute $2 billion. Huang expressed enthusiasm for this investment opportunity and noted the attractiveness of Musk’s ventures.
- Huang labeled Nvidia’s funding in AI data center operator CoreWeave as one of several strategic investments.
- He praised these companies for their role in developing a robust AI infrastructure globally.
The unfolding developments emphasize a dynamic landscape within the AI sector as AMD and Nvidia vie for leadership in a rapidly evolving marketplace.
