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OpenAI and Broadcom have announced a multi-billion dollar deal to develop 10 gigawatts of custom AI chips over the next four years. This collaboration will enable OpenAI to design its own GPUs, powering both its data centers and those of its partners. The chips are expected to roll out in the second half of next year.
AMD and OpenAI just closed a massive GPU deal. Could be worth $60 billion or more over the next five years. AMD stock rocketed up 35% since the announcement.
NVIDIA's $100 billion investment in OpenAI involves using NVIDIA's AI semiconductors in OpenAI's data centers, raising concerns about late-stage bubble dynamics similar to past tech bubbles.
A previous assumption that Broadcom's $10 billion deal was with OpenAI turned out to be incorrect. This highlights the prevalence of vague statements in AI, leading to misinterpretations by investors.
OpenAI has struck a multi-billion dollar deal with AMD, securing 6 gigawatts of compute capacity to power its AI data centers. In exchange, OpenAI could secure up to a 10% stake in AMD if it meets certain deployment milestones.
OpenAI's compute commitments now exceed $1.2 trillion, which is five times what all of big tech plans to spend on CapEx this year. This is also more than 90 times larger than OpenAI's projected $13 billion in revenue for this year.
The AI money bubble is a significant concern, with over a trillion dollars of incremental CapEx being announced, such as the recent OpenAI and Broadcom deal. This level of capital expenditure raises red flags about how it's being financed.
OpenAI's current strategy may involve making acquisitions to expand its capabilities and market reach, leveraging its high valuation.
NVIDIA's investment in OpenAI is a circular deal, creating a market cap increase of $1.8 trillion. It's like the late 90s all over again!
The recent OpenAI-Broadcom deal is valued at approximately $350 billion, or $88 billion per year, based on the estimation that one gigawatt of chips equals about $35 billion. This deal adds to OpenAI's existing commitments with AMD, Nvidia, CoreWeave, and Oracle, totaling around $880 billion.