Wall Street analysts explain how AMD’s own stock will pay for OpenAI’s billions in chip purchases 

AMD and OpenAI have announced an expanded partnership in which OpenAI will assist AMD in refining its Instinct GPUs—AMD’s competitor to Nvidia chips—and commit to purchasing 6 gigawatts of compute capacity over several years. The deal is valued in the billions, but rather than paying with cash, OpenAI will use AMD stock to finance its purchases. AMD has granted OpenAI up to 160 million stock warrants, which vest as certain milestones are met, including significant increases in AMD’s stock price. For example, the final tranche requires AMD’s market cap to reach around $1 trillion, implying a potential value of about $100 billion for OpenAI’s stake if all conditions are met and shares are held without selling. UBS analyst Timothy Arcuri suggests that OpenAI will likely sell portions of its AMD stock over time to cover its GPU purchases, effectively making this a financing arrangement for AMD. Despite the unconventional structure, the deal serves as a strong validation of AMD’s AI GPU capabilities,