Brew Markets Daily – Does OpenAI’s AMD Deal Signal a Bubble? & Who Is Watching “Prediction Markets”

Date: October 6, 2025
Host: Ann Berry
Producer/Co-host: John Croteau

Overview

In this episode of Brew Markets Daily, Ann Berry breaks down headline market stories focused on the AI sector’s latest megadeal—OpenAI’s purchase agreement with AMD—and examines whether this signals a larger AI-driven market bubble. The episode also dives into Reddit’s recent stock volatility and the growing use of prediction markets, especially around the government shutdown. Financial news, stock reactions, and listener questions round out the show.

Key Discussion Points & Insights

1. The Circular AI Money Flows: OpenAI, Nvidia, AMD, and the Bubble Debate

[00:32 – 05:00]

• OpenAI’s Megadeal with AMD:

  • OpenAI agrees to buy 6 gigawatts worth of AMD’s chips, with the deal worth expected tens of billions for AMD, beginning 2026.
  • In exchange, OpenAI may receive up to 10% of AMD’s equity, contingent on share price and deployment milestones.

• Circular Funding:

  • Nvidia just provided OpenAI a $100 billion investment and now, those funds help OpenAI purchase chips from Nvidia’s key competitor, AMD.
  • Nvidia also seeks a stake in Intel, which in turn hopes to make AMD its first major foundry customer, underscoring “everyone is in everyone else’s deals”.

• Is This a Bubble?

  • Ann Berry describes it as a “somewhat uncomfortable circular chapter,” noting risk of overvaluation and systemic risk.
  • Sam Altman (OpenAI CEO) and Jeff Bezos have both suggested elements of a current AI “bubble,” but emphasize longer-term gains will outweigh short-term pain.
  • Contrasting opinions: Hedge funders like Paul Tudor Jones (“It feels like 1999” [03:27]) and Ray Dalio see echoes of the dot-com era. Tech analysts like Dan Ives insist it’s the start of genuine structural change.

• Market Reaction:

  • AMD stock jumped over 25%; Nvidia only moved under 1%—suggesting AMD’s new credibility as an AI chip contender.
  • Goldman Sachs report warns of “potentially dilutive” impacts from these circular investments but remains bullish ([04:45]).
  • “That really is a sign of Nvidia’s scale—barely a nudge down in share price... market cap over $4.5 trillion.” (Ann Berry, [04:56])

2. Reddit’s Market Jitters: AI Licensing, Data Visibility, and Platform Risks

[05:17 – 12:44]

• Stock Drop & Reason:

  • Reddit’s share price fell over 10% last week, triggered by research showing a drop in Reddit content being cited in ChatGPT responses: “as of Tuesday last week, Reddit content was cited in just 2% of ChatGPT responses, down from about 10% the prior month and 14% earlier in September.” (Ann Berry, [08:22])

• Partnership Deals:

  • Google pays Reddit ~$60M/year; OpenAI is rumored to pay $60–70M/year for data access ([06:32]). Deals struck in early/mid-2024 after IPO.

• Platform Competitive Threats:

  • Reddit’s annual report flags major rivals (Google, Meta, Wikipedia, etc.) and highlights the existential risk from LLMs that may “draw users toward their products or services and away from ours.”
  • “Redditors may choose to find information using LLMs... which may have been trained using Reddit content instead of visiting Reddit directly.” (Reddit Annual Report, cited by Ann Berry, [07:15])

• The Core Risk:

  • 50% of users come to Reddit for community engagement; 50% just want questions answered—"using it as sort of a search engine now.” (John Croteau, [09:01])
  • As Google and ChatGPT increasingly summarize rather than link, Reddit’s data becomes less visible—potentially a “Faustian pact”.
  • Concern that these deals may give AI the data it needs, then make platforms like Reddit and Etsy redundant: “Are Reddit and Etsy signing deals that send them into obscurity?” (Ann Berry, [11:34])
  • Broader resonance for any platform monetizing user-generated data when LLMs become the primary interface.

• Reddit’s Response:

  • Efforts to make the site more welcoming, expand internationally with translation, and clamp down on bots to preserve authenticity.

3. Listener Q&A: How Prediction Markets Work

[13:40 – 16:49]

• What Are Prediction Markets?
  Listener Question from Greg in Baltimore ([13:42])

• Ann’s Explanation:

  • “Prediction markets provide event contracts that allow users to place bets on real world outcomes, from Oscar nominations to NFL games to yes, how long the shutdown will last.” ([13:54])
  • Robinhood entered this space in March, reporting over 2 billion event contracts in Q3 (100% Q/Q growth).
  • Contracts represent binary outcomes (e.g., “Shutdown lasts 10 days”): buy ‘Yes’ or ‘No’ at prices from $0.01–$0.99, with payoff structure making odds explicit (e.g., yes at $0.70 = 70% implied odds).

• Regulatory and Practical Obstacles:

  • “Regulators worry these represent just good old fashioned gambling by another name, especially when it comes to political or sports outcomes... Robinhood’s foray is already facing lawsuits in states like Massachusetts.” ([15:11])
  • Despite hurdles, economists and traders find prediction markets to be useful sentiment tools.

• Current Shutdown Odds (as of late October 5):

  • Kalshi: Odds for shutdown lasting >15 days: 64%, >20 days: 50%, >25 days: 40%. ([16:12])
  • Polymarket: Odds for shutdown lasting 30+ days: 29%.

4. Market Wrap: End-of-Day Quick Hits

[17:03 – 17:40]

• Market Movers:

  • Critical Metals up 40% on news of possible Trump admin backing
  • Tesla up nearly 5% after cryptic product teaser for possible new affordable EV model
  • Verizon down 5% after naming ex-Paypal CEO Dan Schulman as new chief

• Ann Berry teases further analysis on Verizon: “Not yet sure whether it’s a way of saying we’re sad to see the old CEO go or a way of saying we’re not super excited about the new one or both...” ([17:41])

• Bank Merger Announcement:

  • Fifth Third to acquire Comerica for just under $11B, creating a top 10 U.S. bank (“the largest in nearly three years...”) ([18:20])

Notable Quotes

• On the AI Circular Economy:

  • “It seems to be happening with a lot of the same key players. So let’s just follow the money.” – Ann Berry ([02:10])
  • “Nvidia agrees to give OpenAI cash. Cash is fungible, and it’s now making its way to a rival. Nvidia feasibly ends up owning, through its stake in OpenAI, a stake in AMD.” – Ann Berry ([02:19])

• On Bubble Warnings:

  • “Sam Altman warned in August that he believes so, a sentiment he reiterated last week... And there he is, at the eye of the storm...” – Ann Berry ([02:45])
  • “It feels like 1999.” – Paul Tudor Jones, quoted by Ann Berry ([03:27])

• Reddit’s Existential Risk:

  • “Redditors may choose to find information using LLMs which... may have been trained using Reddit content instead of visiting Reddit directly.” – Reddit Annual Report, cited at [07:34]
  • “Are Reddit and Etsy signing deals that send them into obscurity? We’d love to hear what you think...” – Ann Berry ([11:43])

• On Prediction Markets:

  • “Prediction markets provide event contracts that allow users to place bets on real world outcomes... The outcome is binary.” – Ann Berry ([13:54])
  • “The theory is that people who put money on the line have thought carefully about the information available...” – Ann Berry ([15:34])

Timestamps for Major Segments

• AI Bubble and Mega-Deals: 00:32–05:00
• Reddit’s AI Tricky Spot: 05:17–12:44
• Prediction Markets Explainer: 13:40–16:49
• Market Closing Headlines: 17:03–17:40
• Banking Merger News: 17:41–18:55

Tone & Style

Consistently sharp, energetic, and lightly skeptical—Ann Berry delivers clear analysis while actively questioning consensus narratives and highlighting both industry excitement and underlying risks.

Summary Takeaways

• The AI sector’s latest deals are raising flags about market “circularity” and bubble concerns, even as participants position for long-term growth.
• Data providers like Reddit face existential questions as AI products potentially usurp their value, despite (or because of) lucrative licensing deals.
• Prediction markets are becoming more mainstream and closely tracked—even as regulation and controversy swirl—offering real-time sentiment data for intricate events like the government shutdown.
• News-driven volatility and major M&A continue to shape broader market dynamics, with retail investors and institutions weighing both headline risk and underlying shifts.