The Mark Cuban Podcast

Episode: OpenAI’s Chip Strategy: AMD in the Mix

Date: October 7, 2025

Episode Overview

In this episode, Mark Cuban dives deep into OpenAI’s groundbreaking multi-year chip deal with AMD, analyzing the deal’s mechanics, its implications for the AI and semiconductor industries, and how OpenAI is revolutionizing large-scale funding for next-generation compute infrastructure. Cuban draws comparisons to previous Nvidia partnerships, discusses how equity plays into OpenAI's funding structure, and unpacks the broader chip race as OpenAI ramps up its hardware ambitions.

Key Discussion Points and Insights

1. The AMD–OpenAI Mega Deal

• AMD will supply 6 gigawatts (GW) of compute to OpenAI—enough energy to power 4.5 million homes.
  • “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…” (00:01)
• The agreement spans multiple generations of AMD Instinct GPUs, starting with the MI450.
• The first gigawatt of compute capacity is scheduled for OpenAI in late 2026.
• The deal could generate tens of billions in revenue for AMD.

2. Immediate Financial Impact and Stock Movements

• AMD stock surged dramatically after the announcement:
  • “Today, the AMD Stock is up 29.9%, basically 30% today… Or 26%, 25% today… 25% in one day is insane for this company.” (02:38)
  • At the same time, Nvidia’s stock dipped 1%.
• Cuban highlights how these tech partnerships can fuel explosive stock market reactions.

3. AMD’s Competitive Positioning Against Nvidia

• AMD claims the new MI450 will outperform Nvidia’s Rubin CPX, both in hardware and software.
• OpenAI is actively collaborating with AMD to shape these chip designs:
  • “[AMD has] been working hard to compete… and AMD claims that this new chip is going to outperform Nvidia's comparable offering… many of those [improvements] are going to be made with OpenAI's input.” (04:16)
• This partnership mirrors how OpenAI influenced Microsoft Azure’s infrastructure following their $10B partnership.

4. A New Strategy for Funding Compute: The Equity Kickback

• OpenAI gains the option to buy up to 160 million AMD shares, representing ~10% of AMD.
  • “OpenAI is going to get the option to buy 160 million shares of AMD stock, which is, which is about 10% of the company.” (06:36)
• Share options are vested in tranches as OpenAI buys more compute, starting after each gigawatt milestone.
• Full vesting is contingent upon AMD’s stock hitting future price milestones (up to $600/share).
  • “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…” (07:14)

5. The “Infinite Money Loop” Funding Scheme

• Cuban observes that OpenAI is leveraging partnerships to boost the value of chipmakers’ stocks, then benefits from this rise via their equity deal.
  • “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.” (08:40)
• This is compared to their Nvidia stock deal—now repeating with AMD, shifting the competitive landscape.
• Cuban likens this to "playing the stock market game better than anyone else."

6. Industry and Leadership Responses

• AMD CEO Dr. Lisa Su:
  • “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.” (10:01)
• Sam Altman, OpenAI CEO:
  • “[This deal is] 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.” (10:38)

7. The Broader AI Chip Race and Supply Chain Context

• In the last month alone:
  • Nvidia agreed to invest up to $100 billion, supplying OpenAI with 10 GW.
  • OpenAI and Brio.com closed a $10B deal for custom chip development.
  • Additional collaborations under the Stargate initiative (with Oracle, SoftBank, Samsung, and SK Hynix).
• “There is a lot going on here… 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.” (12:02)

8. Takeaways and Strategic Insights

• “My big takeaway from this is basically that OpenAI needs more money. They've run out of, like, a lot of the traditional ways…” (13:14)
• OpenAI's new funding playbook leverages equity, partnerships, and the resulting stock price surges to continually reinvest and scale compute infrastructure.

Notable Quotes & Memorable Moments

• On OpenAI’s funding genius:
  • “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… it's very obvious what's happening and how they're funding this basically to boost these companies, which is… it's just crazy.” (14:44)
• On the scale of OpenAI's ambition:
  • “OpenAI will inevitably get an absolutely absurd amount of money deploying the strategy, without a doubt.” (15:39)

Timestamps for Essential Segments

• [00:01] — Podcast opening, context around the OpenAI–AMD deal
• [02:38] — AMD stock price reaction and Nvidia comparison
• [04:16] — Technical details of the chip supply and Mi450 edge
• [06:36] — Explanation of OpenAI’s equity deal and vesting model
• [08:40] — Cuban’s analysis of OpenAI’s infinite funding loop
• [10:01] — Official statements from AMD and OpenAI CEOs
• [12:02] — Broader industry deals in play (Nvidia, Brio, Stargate partners)
• [13:14] — Cuban’s main strategic takeaway

Conclusion

Mark Cuban’s analysis paints a picture of OpenAI as a master of modern financial engineering—outpacing rivals by using clever partnerships to finance the next leap in AI compute. The AMD deal is not just a chip contract, but a model for how OpenAI is weaponizing capital markets, supply agreements, and equity for mutual gain. With similar deals likely on the horizon, the implications for the AI chip industry, stock market, and future of compute infrastructure are both profound and far-reaching.