The stakes of OpenAI's dealmaking

Core Insights - OpenAI is actively pursuing partnerships, recently collaborating with AMD in a multibillion-dollar deal to supply over 6 gigawatts of GPUs, while OpenAI will acquire a roughly 10% stake in AMD [1][2] - AMD's stock surged over 30%, reflecting market confidence in OpenAI's potential and the lucrative opportunities within the AI sector [2] - OpenAI's partnerships highlight its strategic approach but also reveal vulnerabilities, as it lacks a profitable business model established before the recent surge in interest in large language models (LLMs) [2][5][7] Company Positioning - OpenAI currently leads in app rankings with its video generation tool Sora and ChatGPT, indicating strong user engagement [6] - The company's dealmaking strategy involves collaboration with chipmaking rivals, positioning it as a significant player in the AI landscape, though it lacks a fallback plan or alternative revenue streams [6][7] - Unlike major tech firms, OpenAI does not possess a diverse portfolio, lacking social media, advertising, hardware, e-commerce, or cloud storage capabilities [9][10] Market Dynamics - The enthusiasm for generative AI investments may face challenges, but major tech firms are still managing their investments within their operational cash flow limits [4] - OpenAI's lack of established revenue streams compared to its tech giant competitors raises questions about its long-term sustainability [5][10]