OpenAI's Tech Deals Spark Revenue Concerns, AMD Shares Surge
Wall Street analysts have raised concerns about OpenAI's recent partnerships with tech giants Oracle and Nvidia, as well as its deal with AMD, citing potential revenue circularity and capitalization issues. Despite these worries, AMD's shares surged following its agreement with OpenAI.
OpenAI's recent deals have sparked analyst concerns. They worry about 'circular' revenue and interconnectivity among OpenAI, Oracle, and Nvidia, reminiscent of past market disasters. OpenAI's revenue is projected at $12 billion this year, but losses could see it burn through $115 billion by 2029.
In its deal with AMD, OpenAI is set to receive multiple generations of AMD's Instinct processors. AMD will issue warrants for up to 160 million shares, potentially giving OpenAI a 10% stake in AMD. The market reacted positively, with AMD shares soaring by over 25%. However, analysts like Paul Tudor Jones have expressed concerns about the 'circularity' in AI data center build-out dynamics.
OpenAI's partnerships have raised concerns about revenue interconnectivity and capitalization. Despite these worries, AMD's deal with OpenAI was met with a positive market response. As OpenAI acquires a stake in AMD and collaborates on AI chip development, the tech industry awaits further developments.
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