Bloomberg Businessweek Podcast Summary

Episode: AMD Inks Chip Deal With OpenAI That Triggers Explosive Rally
Date: October 6, 2025
Hosts: Carol Massar & Tim Stenovec
Special Guests: Ed Ludlow (Bloomberg Tech), Mandeep Singh (Bloomberg Intelligence), Leslie Marks (McKenzie Investments), Rick Welts (CEO, Dallas Mavericks)

Overview

This episode unpacks the ripple effects of AMD’s landmark chip deal with OpenAI, which sent AMD shares soaring and ignited sharp market moves across tech. Joining from OpenAI’s Developer Day, Bloomberg’s Ed Ludlow and Mandeep Singh break down the business intricacies, circular financing questions, and what OpenAI’s growing ecosystem means for tech companies (and their shareholders). The episode also checks in with Dallas Mavericks CEO Rick Welts on the business of sports, and with Leslie Marks of McKenzie Investments about the broader market environment.

Key Discussion Points & Insights

1. AMD-OpenAI Deal: Structure & Implications

• Milestone-Driven Equity:
  • Unlike Nvidia's deal where investment is more direct, AMD will only grant OpenAI equity once strict milestones—especially building 1 gigawatt of data center capacity—are achieved ([02:13] Ed Ludlow).
• No Upfront Capital:
  • “AMD will sign over stock to OpenAI only when they’ve met specific milestones... OpenAI has to fund, finance, and build 1 gigawatt of capacity... the burden is still on them.”
    — Ed Ludlow ([02:13])

2. Circular Financing & Market Complexity

• OpenAI’s Web of Deals:
  • Unlike Nvidia’s deal (which “could be worth up to $100 billion with OpenAI”), the AMD agreement avoids direct circularity by tying equity transfers to performance ([03:08] Tim Stenovec, [03:35] Ed Ludlow).
  • Multiple financing possibilities (debt, issuing equity, others), with no exact answers from OpenAI:
    • “Greg Brockman said we’ll look at all those mechanisms.”
      — Ed Ludlow ([03:35])
• Market Logic:
  • “The market is simply focused, irrespective of the mechanism for financing, on the revenue growth that comes out the other side.”
    — Ed Ludlow ([04:53])

3. AI Market Momentum & Public Markets Reaction

• Stock Moves by Mention:
  • Shares of Cisco, Figma (up 16%), Salesforce (up 2.6%), HubSpot, Zillow, and TripAdvisor all leaped following mentions in OpenAI’s event ([07:24] Tim Stenovec).
• OpenAI’s Unlisted Power:
  • OpenAI, despite being private, commands huge market attention, moving stocks just by association.
    • “OpenAI is fast becoming a whale in the stock market… its narrative, the market moves, are remarkable.”
      — Carol Massar ([09:44])
    • “It was the confirmation of OpenAI’s $500 billion valuation… that was driving sentiment in the public equity markets.”
      — Ed Ludlow ([10:21])

4. The New Operating System: ChatGPT as Platform

• Expanding Ecosystem:
  • OpenAI’s strategy is to make ChatGPT an “operating system,” integrating third-party software via APIs, turning ChatGPT into something akin to the Apple App Store.
  • “What OpenAI announced was very simple API access for several third parties to ChatGPT … the idea is you link it to, say, your Figma platform or your Spotify account.”
    — Ed Ludlow ([11:46])
• Software is the Sticky Part:
  • “The application is the sticky part. It's never the chips or the architecture. And that's what OpenAI is saying: we have the best models… we want diversification in terms of inference capacity.”
    — Mandeep Singh ([19:36])

5. Winners, Losers, and the Race for AI Infrastructure

• Threats to the Hyperscalers:
  • OpenAI moving beyond reliance on Microsoft, pursuing independence with its own data centers, and entering $300B deals with Oracle ([21:06] Mandeep Singh).
  • OpenAI wants chips from multiple vendors (AMD, Nvidia) to reduce dependency and gain bargaining power.
• Nvidia’s Position:
  • Still holds moat in training due to chip performance, especially on power efficiency, but faces pressure on margins and pricing from AMD-OpenAI deal ([24:54]-[26:59]).
  • “Nvidia having 75% gross margin… now that OpenAI is saying, ‘I’m going to use AMD’... ultimately Nvidia has to lower its pricing.”
    — Mandeep Singh ([24:56])
  • Not expected that Nvidia would indirectly own AMD via equity “that’s too far-fetched.”
    — Mandeep Singh ([23:06])

6. Economic and Societal Impact of Generative AI

• Cost & Sustainability:
  • High computational costs could limit use cases, especially for generative video tools like OpenAI’s “Sora.”
    • “This technology is expensive... To generate that type of video, you are spending a pretty decent chunk of compute and it’s costing you a lot.”
      — Mandeep Singh ([30:55])
• Job Disruption & Societal Fears:
  • Widespread potential for white-collar job displacement (e.g., coding, customer service, content creation).
  • “Let’s say it gets to the point… AI is just going to decimate some white-collar jobs… who are Meta’s advertisers going to be if none of us have jobs?”
    — Tim Stenovec ([28:49])
  • Dangerous potential for persuasive deepfakes, political misinformation, and endless “stupid stuff” to consume ([29:14]-[30:31]).

7. Investment Perspectives

• Are We in a Bubble?
  • Leslie Marks (McKenzie Investments) argues fundamentals like improved margins support today’s higher valuations, not bubble behavior ([47:05]-[49:52]).
  • Strong earnings momentum, margin expansion, and bullish sentiment are supporting higher multiples.
  • Advocates diversification beyond megacaps, highlighting Japan, gold, and China tech as opportunities ([49:52]).

Notable Quotes & Memorable Moments

“AMD will sign over stock to OpenAI only when they’ve met specific milestones… OpenAI has to fund, finance, and build 1 gigawatt of capacity… the burden is still on them.”
— Ed Ludlow ([02:13])

“Nvidia commits to making a $100 billion investment into OpenAI… but they do take OpenAI equity. In this case, AMD passes its own shares to OpenAI, but not capital.”
— Ed Ludlow ([03:35])

“The market is simply focused, irrespective of the mechanism for financing, on the revenue growth that comes out the other side.”
— Ed Ludlow ([04:53])

“OpenAI is fast becoming a whale in the stock market that it is shunned. I mean, OpenAI is not a publicly traded company. And yet… shares of companies are moving as a result of this deal.”
— Carol Massar ([09:44])

“The application is the sticky part. It's never the chips or the architecture… we have the best models. We have ChatGPT, the application. So that's the end product.”
— Mandeep Singh ([19:36])

“If I have more compute capacity, one: I can undercut everyone else in terms of offering my model, and I'll be more aggressive with pricing… Just being a model provider is not a good business. That's what OpenAI [is] suggesting.”
— Mandeep Singh ([23:35])

“Let's say it gets to the point where people are getting so good at creating this stuff without actually doing it with skills. ... The concern is that AI is just going to decimate some white-collar jobs—who are Meta platforms' advertisers going to be if none of us have jobs?”
— Tim Stenovec ([28:49])

Timeline of Key Segments

| Timestamp | Segment / Highlight | |---------------|--------------------------------------------------------------------------------------------------------------------------| | [02:13] | Ed Ludlow explains AMD-OpenAI deal structure and financing uncertainty | | [03:08]-[04:33]| Circular financing and comparison to Nvidia-OpenAI deals | | [05:27]-[06:13]| Discussion of current market logic, examples from other tech deals | | [07:24] | Stocks rallying on OpenAI mentions during the event | | [09:44] | OpenAI’s outsize market impact, even as a private company | | [11:46]-[13:11]| ChatGPT as an operating system and App Store analogy | | [18:41] | Mandeep Singh on AMD’s opportunity and deal context | | [21:06] | OpenAI’s push for hyperscaler independence and chip diversification | | [22:01] | OpenAI’s current financial position – negative gross margins, compute intensity of AI | | [24:54] | Potential impact on Nvidia; pricing pressure from AMD deal | | [26:02] | Market constraints: capacity, power, and lead times | | [28:49] | Societal risks—deepfakes, job displacement through AI | | [30:55] | Cost realities for generative AI content (e.g. Sora); OpenAI subsidies | | [47:05] | Leslie Marks on valuation, fundamentals, and equity market context |

Tone & Takeaway

Smart, skeptical, and analytical—hosts and guests unpack the hype and unknowns behind headline-grabbing AI deals, always tying the financial engineering back to underlying business models and real-world market impacts. While OpenAI’s moves are fueling unmatched market optimism (and fear), the conversation urges listeners to stay focused on fundamentals—earnings, margins, and sustainable use cases—while acknowledging the rapid societal and workforce changes accelerated by generative AI.

For those who haven’t listened:
This episode is a fast-paced, insightful look at the intersection of AI’s business boom, tech stock surges, the race for infrastructure dominance, and what it means for both investors and society at large. Expect candid analysis from industry insiders, some cautious optimism, and healthy skepticism on what’s substance and what’s sizzle in AI’s market moment.