AMD Joins Forces with OpenAI - The Last Invention is AI

Episode Summary: AMD Joins Forces with OpenAI

Podcast: Joe Rogan Experience for AI
Date: October 7, 2025
Host: Joe Rogan Experience for AI

Main Theme

This episode explores the groundbreaking multi-billion dollar chip supply deal between AMD and OpenAI. The discussion delves into the deal's mechanics, its implications for the AI and semiconductor industries, and the innovative, almost financial-engineering-like strategies behind OpenAI's funding efforts. The episode draws parallels to previous big-tech alliances and highlights the competitive landscape as AMD rises to challenge Nvidia.

Key Discussion Points & Insights

1. Overview of the AMD-OpenAI Deal

[00:01] AMD will supply OpenAI with 6 gigawatts (GW) of compute over multiple years—enough to power 4.5 million homes.
The deal is worth billions and represents a strategic shift, compared to OpenAI’s previous approach with Nvidia.

2. Strategic Implications

This deal is potentially the funding model for OpenAI’s next era, scaling massive projects in robotics and supercomputing.
OpenAI's strategy: "This is going to be the strategy that we cover in the show today… different than what they've done with Nvidia." [00:01]
AMD's response: The company is eager to not miss out on the AI “gravy train” Nvidia previously dominated.

3. Details & Structure of the Deal

Chip Timeline: AMD to begin delivering with its new MI450 GPU—the first gigawatt of capacity set for the second half of 2026.
Generational Leap: AMD claims the new chip will outperform Nvidia’s competing Rubin cpx GPU, using significant input from OpenAI for hardware and software optimization.
“It seems like AMD is almost getting… if they work with OpenAI to create the exact GPUs OpenAI needs, every other AI company is going to use that, is going to need that.” [02:17]

4. Financial & Stock Market Movements

AMD’s Stock Reaction:
- AMD stock jumped 25-35% following the announcement (fluctuating during the day).
- Nvidia stock dropped by 1%, signaling a sudden shift in AI chip leadership perception.
- “25% in one day is insane… It feels like AMD is about to see a big rise because they're making this partnership.” [01:20]

5. OpenAI’s Equity Play

As part of the deal, OpenAI receives options to buy 160 million AMD shares—about 10% of the company.
The equity vests in tranches (“first after 1 GW delivered, more as 6 GW fulfilled”) and is pegged to ambitious AMD stock price milestones—culminating at $600/share.
“They're making money from all sides of the deal. Absolutely fascinating.” [07:32]
This echoes OpenAI’s prior approach with Microsoft and Azure.

6. Industry-Wide Impacts & Parallel Deals

References to OpenAI’s other recent deals:
- Nvidia: Agreed to invest up to $100 billion for 10 GW of compute.
- Brio.com: $10 billion for development/manufacturing of custom AI chips.
- Stargate initiative: Expanded collaborations with Oracle, SoftBank, Samsung, SK Hynix, especially around memory chips and infrastructure.
“There’s a lot of deals going down… OpenAI needs more money.” [08:44]

7. The Infinite Money Loop

The host outlines how OpenAI ignites value: Announce a deal, drive supplier stock up, collect equity, potentially liquidate for funds, and reinvest in more tech.
“Feels like they’re playing the stock market game better than anyone else… It's like these infinite money loops.” [04:37]

8. Shifting Public Messaging from OpenAI

Sam Altman quoted as calling this deal “a major step in building the compute capacity to realize AI’s full potential”—notably not mentioning AGI.
“He doesn't really say AGI anymore… just like, the full potential of AI.” [05:32]
AMD CEO Dr. Lisa Su calls it “a true win-win… enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”

Notable Quotes & Memorable Moments

On OpenAI’s Equity Strategy:

“When your stock gets to 600, we get 10% of your company… We're going to do these tranches. And OpenAI is like getting equity in this company because they're buying from the company and they know that announcing this deal… boosts it and they get equity and they get compensated for the boost.”
— Host, [03:53]
On Industry Disruption:

“This is what AMD said about this. CEO AMD Dr. Lisa Su said, ‘We are thrilled to partner with OpenAI to deliver AI compute at massive scale. This partnership brings the best of AMD and OpenAI together to create a true win-win and enabling the world's most ambitious AI buildout and advancing the entire AI ecosystem.’”
— Host, quoting Lisa Su, [05:17]
On Funding Strategy:

“It's like they're making money from all sides of the deal. Absolutely fascinating… it's very obvious what's happening and how they're funding this basically to boost… these companies, which is, it's just crazy.”
— Host, [07:32]

Important Timestamps for Key Segments

[00:01] — Introduction & scope of the OpenAI-AMD deal
[01:20] — Immediate market reaction (AMD/Nvidia movement)
[02:17] — Significance of collaborative chip design
[03:53] — Mechanics of OpenAI’s equity acquisition and stock-based funding
[05:17] — Partnership statements from AMD and OpenAI leadership
[07:32] — Analysis of the “infinite money loop” strategy and funding model
[08:44] — Broader look at OpenAI’s many concurrent tech deals

Conclusion

The episode delivers a clear, compelling look at how OpenAI's bold, multi-layered financial and partnership strategies are shaping the race for next-gen AI hardware. By leveraging major supplier stock surges, negotiating equity, and setting high-stakes milestone-based deals, OpenAI is creating funding loops almost unique in tech. AMD’s win signals real competition for Nvidia and possibly sets an industry template for future AI mega-deals. The discussion closes with the host's fascination at the transparency and audacity of OpenAI’s approach, and a prediction that this model could soon become the norm for hyper-scale innovation funding in tech.

Transcript

A (0:01)

AMD has just made a deal to supply 6 GW of compute to OpenAI. Now this is a chip deal worth billions of dollars. But I think it's fascinating for a lot of reasons because basically I think the strategy that OpenAI and AMD have employed here to make this deal is going to be the strategy OpenAI uses to fund their insane amount of basically insane amount of money that they're going to need to build the compute necessary for the, the next generation of OpenAI. What they're planning on doing with robotics, what they're planning on doing with scaling up AI to do. There's just insane projects that need so much money and most people are questioning where does all this money come from? This is going to be the strategy that we cover in the show today that they're doing with AMD to roll this out. And this is different. This deal right now, this AMD deal is different than what they've done with Nvidia. So this is quite, quite fascinating. We're going to get into all of it. Before we do, I wanted to say if you want to use this specific, if you want to use an AI platform to get access to all of the top models without having to pay subscriptions to them all, I'd love for you to try AI box. We have over 40 models. Image, text, audio, all in one platform. 11 labs for audio. If you're paying for multiple subscriptions, I would recommend checking this out. And we just launched something called the AI Box Builder, which lets you describe a tool that you want to build. You and the box builder will chain together multiple AI models. It will put all the prompts in and it will build tools that can automate a lot of what you do with AI in one click. So it's super cool. If you want to go check it out, it's $20 a month. AI box. AI. All right, let's talk about AMD. So this is a multi year chip supply deal that's going to be happening. It could generate tens of billions of dollars in revenue for amd. And before we get into even the what happened here, I just want to tell you what happened to the AMD stock after this announcement. Today, the AMD Stock is up 29.9%, basically 30% today, which is. Or 26%, 25% today. I guess it's 20, 30% in the last day. It's moving around as we're talking. It looks like it's slowly slipping, but basically you get the idea. 25% in one day is insane. For this company. Um, and it feels like it is officially. Oh, and by the way, at the same time, Nvidia is down 1%. So it feels like AMD is about to see a big rise because they're going to be making this partnership. So here's, here's what's going on. AMD is going to supply 6 gigawatts of compute OpenAI. That's enough to power 4.5 million homes. They're doing this across a bunch of different generations of their Instinct GPUs. So they're starting with their M1 or Mi450 GPU, and OpenAI is going to get their first gigawatt of capacity in the second half of next year, 2026. So that's when the new chip is scheduled for deployment. So it appears AMD has seen what Nvidia is doing, doesn't want to miss out on the gravy train, has been working hard to compete here. And AMD claims that this new chip is going to outperform Nvidia's comparable offering. So Nvidia has the Nvidia Rubin cpx and they claim that it is going to basically outperform them. And they're doing this through hardware and software improvements. Many of those are going to be made with OpenAI's input. So this is kind of starting to remind me of the deal that OpenAI made with Microsoft. When opening, I first came with ChatGPT and Microsoft Azure and Microsoft put in $10 billion and OpenAI worked very closely with Azure to help, you know, explain the exact needs of the chips in order to, and the GPUs in order to make something that could train AI models really well. It seems like AMD is almost getting like, this is a, this is a big benefit to AMD because if they work with OpenAI to create the exact GPUs OpenAI needs, every other AI company is going to use that, is going to need that. And, you know, I mean, they're helping their supplier buy more from them. So it makes a lot of sense. This is, I think, interesting because part of this agreement is that OpenAI is going to get the option to buy 160 million shares of AMD stock, which is, which is about 10% of the company. This is, you know, a publicly traded company. OpenAI is getting the option to buy 10% of this company and the first tranche of that is going to invest after the first gigawatt. So it's going to be 6 gigawatt total. But the first gigawatt is deployed, then they're going to get the first tranche of that and then they'll have a bunch of additional tranches that are going to invest as OpenAI buys up the total 6 gigawatts from them. Now OpenAI's stake is going to be directly tied to AMD's stock price. So. So, like, let's just stop for a second and talk about what's going on here. And they have these, like, stock price milestones. They have. The final tranche of vesting is if the stock is when the stock price reaches $600 per share. And context is that on Friday, AMD shares closed at $164. Now they're like, I think over $200. Or at the beginning of, you know, this week they were at $220, which is was up 50, 35%. Following the news of the deal. They slipped a little bit down. So then it was down to like 25%. That's what you heard me quote at the beginning of the podcast. But basically this announcement boosted the stock 25. Today it's 25%, but it boosted initially 35%. Huge spike in the stock and to the point where OpenAI is like, yeah, I mean, when your Stock gets to 600, we get 10% of your company. We're going to do these tranches. And OpenAI is like getting equity in this company because they're buying from the company and they know that announcing this deal. This is exactly like what happened with Nvidia where they made these big, like, partnership announcements and Nvidia stock exploded. Now we have AMD stock exploding because they made this partnership. And what's interesting is then OpenAI is going straight back and getting equity in the company. So it's like they make a partnership that boosts it and they get equity and they get compensated for the boost, which gives them more money to spend on more projects. It's like these infinite money loops that OpenAI, it feels like they're playing the stock market game better than anyone else. They're literally like, they're like, we will buy from you and we want 10% of your company as upside when your stock price grows, because we announced we're buying from you in the future, before anything's even delivered, the stock price goes up. So this is what AMD said about this CEO AMD Dr. Lisa Su said, We are thrilled to partner with OpenAI to deliver AI compute at massive scale. This partnership brings the best of AMD, AMD and OpenAI together to create a true win win and enabling the world's most ambitious AI buildout and advancing the entire AI ecosystem. Sam Altman said that it was, quote, a major step in building the compute capacity to realize AI's full potential. I feel like he doesn't really say AGI anymore. He's shied away from that term. He's just like, the full potential of AI, whatever that potential is, this is what we need to get there. Last month alone, Nvidia agreed to invest up to $100 billion into OpenAI, and they were going to supply them with 10 gigawatts. OpenAI and Brio.com also signed a deal for $10 billion to develop and manufacture custom AI chips. And OpenAI said that its Stargate initiative with Oracle and SoftBank are going to be expanding. That's according to a quote from TechCrunch. So I think this is interesting. There's a lot of deals going down, including one with OpenAI and Samsung and SK Hynix to get some DRAM memory chips for the Stargate project and build that out in South Korea. So there is a lot going on here. But I think that my big takeaway from this is basically that OpenAI needs more money. They've run out of, like, a lot of the traditional ways, like VC funding and then even like, you know, investments from Nvidia. Okay, sure, they just got $100 billion from Nvidia, but it's like, hey, like, what now? And so it seems like the next strategy is they go make partnerships with chip companies and are like, hey, before we announce the partnership, give us a certain amount of equity in your company. When your stock price goes up, we'll announce that your stock price will go up. We'll get a lot of equity. We could sell that equity for more money and then we could buy more chips with it. So it's like they're making money from all sides of the deal. Absolutely fascinating. I think we're going to see a lot more of this in the future. And I'm not like, mad. I mean, I don't think this is necessarily a bad thing, but it's, I mean, fascinating. And it's very obvious what's happening and how they're funding this basically to boost. Boost these companies, which is. It's just crazy. So you could see that OpenAI will inevitably get an absolutely absurd amount of money deploying the strategy, without a doubt. Anyways, thank you so much for tuning into the podcast today. I hope you enjoyed it. If you learned anything new, it would mean the world to me. If you could leave a rating and review over on Spotify. I know I asked for this all the time. And by the way, Apple listeners are like 70% of this show and Spotify listeners have left the exact same amount of reviews as an AS Apple listener. So if you are an Apple listener, do me a favor. Drop a review on the show if you appreciate it. If you listen, we got to keep up the reviews with the Spotify listeners. There's a lot less of them. They leave more reviews. But I know that to the Apple listeners today, a special call out. If you could leave a review, I'd really appreciate it. All right. Thanks so much and thank you. Make sure to check out AI box AI to get access to all of the AI models on one platform and build some incredible AI tools. All right, thanks so much. Catch you guys in the next episode.