When people buy a car they sometimes get a loan from the auto manufacturer’s financial services arm. What they don’t usually get are warrants struck at a penny for 10% of the manufacturer.
You sound like you know what you’re talking about. I only think I know what I’m talking about. Help me understand: What am I missing in the OpenAI / AMD deal that makes it non circular?
OpenAI: We need lots of GPUs, you make GPUs, but your GPUs are not quite equal to Nvidia's GPUs. And we are a growth startup, we don't have a lot of cash, can you give us a hefty discount on those GPUs?
AMD: We need cash too, you know? We'd love to sell you those thousands and thousands of high end GPUs, that would cover some of our R&D, and we could one day match NVidia. But we don't swim in cash either. We can't give you the discount.
OpenAI: What can you give us? You must be able to throw in something there. Otherwise, honestly, we can't make the deal.
AMD: What if we give you some equity? And if our deal goes well, and our GPUs start being viable alternatives to Nvidia's, maybe we'll be able to get close to Nvidia's market cap and even surpass them, just like we did with Intel.
OpenAI: Brilliant. We love it.
AMD: Yes, but that equity will be contingent on how the deal goes.
> You sound like you know what you’re talking about.
Honestly, I'm not an expert either, but I've run a company, and I can all but guarantee that credit_guy above really does not know what he is talking about.
I've replied else-thread, in detail, on exactly why his analogy to mortgage and car loans are incorrect.
His main point that "these deals cannot be circular because mortgage and car finance are not circular" is incorrect. The mortgage and car finance deals are not analogous to the Nvidia/OpenAI or AMD/OpenAI deals.
You sound like you know what you’re talking about. I only think I know what I’m talking about. Help me understand: What am I missing in the OpenAI / AMD deal that makes it non circular?