Wall Street analysts explain how AMD's own stock will pay for OpenAI's billions in chip purchases

Core Insights - OpenAI has entered into a partnership with AMD to refine AMD's Instinct GPUs and will purchase 6 gigawatts of compute capacity, with the deal valued at billions in revenue for AMD [1][2] - OpenAI will pay for this deal using AMD stock warrants, potentially up to 160 million shares, which will vest based on stock price milestones [2][3] - If OpenAI holds onto the AMD shares until the end of the deal, the stock could be worth approximately $100 billion, contingent on AMD reaching a market cap of around $1 trillion [3][4] AMD's Strategic Positioning - The partnership is seen as a way for AMD to finance OpenAI's GPU purchases while gaining significant market share, estimated at 30%, in the next-generation data center build-out [9] - The validation from OpenAI regarding AMD's AI GPUs is expected to enhance AMD's adoption momentum among other customers, particularly cloud service providers [5][9] - Although the deal is considered "arguably less attractive" than Nvidia's investments in OpenAI, it is viewed as a major validation of AMD's roadmap [9]