This 6GW Deal Is Almost NVIDIA Sized
The move to measure AI hardware deals in gigawatts instead of processing power or even a straight dollar value makes sense, and one can hope opens the eyes of some to the costs of their random AI usage. To put it in perspective, according to Cushman & Wakefield data centres across the globe consumed ~7.4 GW in 2023, so adding 6GW would fall just short of doubling the total power consumption of just two short years ago. This is in addition to the 10GW of power NVIDIA plans to provide OpenAI which would more that double global power consumption.
The deal does represent a huge win for AMD and should guarantee a future for the company in the AI market, as reflected by the 29.5% jump in AMD’s stock value today. That stock price doesn’t have an effect on part of the deal between OpenAI and AMD, which is the offer for OpenAI to purchase up to 10% of the chipmaker’s stock for $0.01 per share dependant on how AMD delivers processing power. There are also certain conditions which will take effect if AMD hits $600 a share on the market. That makes the actual value of the deal one for economists to calculate but it is great news for AMD.
We shall see how well AMD can ramp up production of what we assume will be their Helios AI racks, and what it means for gamers over this year and the next.
As part of the agreement, to further align strategic interests, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, structured to vest as specific milestones are achieved. The first tranche vests with the initial 1 gigawatt deployment, with additional tranches vesting as purchases scale up to 6 gigawatts.
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