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AMD's AI chip deals with OpenAI, Meta offer deep discounts: report

By PulseAugur Editorial · [3 sources] ·

SemiAnalysis suggests that AMD's warrant deals with OpenAI and Meta are not merely equity sweeteners but function more like substantial rebates on compute costs. These warrants, which vest based on AMD's stock price reaching up to $600 and can be exercised for a nominal fee, could offer discounts ranging from 85% to 105% for OpenAI. This structure effectively means AMD might be paying customers to take their hardware, a strategy that could be beneficial if it drives significant volume and increases AMD's stock price, which has already seen gains due to AI accelerator demand. AI

IMPACT This analysis suggests potential shifts in how AI hardware is priced and distributed, impacting compute costs for major AI players.

RANK_REASON Analysis of existing financial deals rather than a new product release or company announcement.

Read on X — SemiAnalysis →

AI-generated summary · Google Gemini · from 3 sources. How we write summaries →

AMD's AI chip deals with OpenAI, Meta offer deep discounts: report

COVERAGE [3]

  1. X — SemiAnalysis TIER_1 English(EN) · SemiAnalysis_ ·

    Push the warrant rebate to the top tranche — AMD at $600, everything vested, warrants exercised for a penny — and the implied effective discount is as high as 8

    Push the warrant rebate to the top tranche — AMD at $600, everything vested, warrants exercised for a penny — and the implied effective discount is as high as 85% to even 105%. At that point, you're paying the customer to take them and funding it with your own equity. That's a

  2. X — SemiAnalysis TIER_1 English(EN) · SemiAnalysis_ ·

    Per AMD's 8-K, the warrants vest in tranches tied to share price, topping out at a $600 hurdle, and can be exercised for $0.01, essentially nothing. So the valu

    Per AMD's 8-K, the warrants vest in tranches tied to share price, topping out at a $600 hurdle, and can be exercised for $0.01, essentially nothing. So the value handed back to the buyer scales directly with AMD's stock. (2/3) https://t.co/8xB0fmKWHO

  3. X — SemiAnalysis TIER_1 English(EN) · SemiAnalysis_ ·

    AMD's warrant deals with OpenAI and Meta usually get described as equity sweeteners. Run the math, and these look more like a rebate that matches the price of t

    AMD's warrant deals with OpenAI and Meta usually get described as equity sweeteners. Run the math, and these look more like a rebate that matches the price of the compute itself, with up to a 105% discount for OpenAI. (1/3)🧵 https://t.co/pMmnrnQ0wp

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