Latest / THE DAILY BRIEF / AMD Shares Soar on OpenAI Deal

Transcript

AMD Shares Soar on OpenAI Deal · THE DAILY BRIEF

• 0:00
  Speaker 1: You have exposure to AMD is added more than seventeen
• 0:03
  Speaker 1: billion dollars in market cap on one day, Alan, what
• 0:05
  Speaker 1: does this deal signal?
• 0:07
  Speaker 2: Yeah, Well, I think it's a really exciting deal here
• 0:10
  Speaker 2: for AMD at it validates their roadmap and their silicon
• 0:14
  Speaker 2: and soccer strategy, and I think it gives them a
• 0:17
  Speaker 2: really big lead customer to really scale.
• 0:20
  Speaker 3: And I think that this will.
• 0:22
  Speaker 2: Probably attract other customers to their roadmap and continue to
• 0:26
  Speaker 2: build out rock. And I've always had this like thesis
• 0:28
  Speaker 2: that the TAM is really big and if companies can
• 0:33
  Speaker 2: deliver on that compute, that there's a lot of companies
• 0:37
  Speaker 2: that can win in the overall compute term. So overall,
• 0:41
  Speaker 2: very exciting, and you know, I think it's got a
• 0:43
  Speaker 2: good setup for the next few years for the company's runway.
• 0:47
  Speaker 1: I mean, Lisa Sue just telling us that maybe she's
• 0:49
  Speaker 1: being conservative when she puts the AI Accelerate to TAM
• 0:51
  Speaker 1: at five hundred billion dollars. Tony, I'm interested though, at
• 0:54
  Speaker 1: Opening Eye telling us Greg saying that we're looking at
• 0:56
  Speaker 1: all kinds of way of financing this. How are you
• 1:00
  Speaker 1: feeling about this knitting together of purchases and creators, designers
• 1:06
  Speaker 1: of chips.
• 1:08
  Speaker 2: Yeah, well, I think that taking a step back over
• 1:10
  Speaker 2: the last kind of ten years, everybody's goin underestimated this,
• 1:13
  Speaker 2: Tam And I think what's exciting about AI is that
• 1:17
  Speaker 2: there are a lot of productivity use cases here and
• 1:20
  Speaker 2: we're starting to see AI agents really form and then
• 1:23
  Speaker 2: I think physical AI. So I think as long as
• 1:25
  Speaker 2: like the n use cases are delivering a lot of value.
• 1:28
  Speaker 3: And there's promise there, I think that's what matters.
• 1:30
  Speaker 2: In terms of the ROI and I think a lot
• 1:32
  Speaker 2: of these kind of contracts, I mean they are backstop
• 1:35
  Speaker 2: by really blue chip companies like Mirosov or Oracle.
• 1:39
  Speaker 3: So in terms of you.
• 1:40
  Speaker 2: Know, how I'm feeling about the financing, I think it's
• 1:42
  Speaker 2: it continues to be probably a good attractive way to
• 1:45
  Speaker 2: do as long as the use cases are.
• 1:46
  Speaker 4: Intact, Tony, the mechanics of the deal are the open
• 1:51
  Speaker 4: AI has the right to buy up to one hundred
• 1:54
  Speaker 4: and sixty million shares of AMD at a penny apiece,
• 1:58
  Speaker 4: but that right contingent on the upper rational and financial
• 2:01
  Speaker 4: milestones that we discussed. It is not circular financing, it's
• 2:05
  Speaker 4: something different. But how comfortable are you with that mechanism?
• 2:11
  Speaker 2: Well, I think it could make a lot of sense, right,
• 2:13
  Speaker 2: Like I mean, it puts the two companies kind of
• 2:15
  Speaker 2: in co development and partnership, and I think there's shared
• 2:20
  Speaker 2: economics and it's a win win for both companies. I
• 2:23
  Speaker 2: think some of the prices the warrants are strikeed at
• 2:25
  Speaker 2: a pretty you know, high price on the AMB stock price.
• 2:29
  Speaker 2: So I think it's good for both sides and if
• 2:32
  Speaker 2: they win, they win together.
• 2:33
  Speaker 3: So to me, I think it can make sense.
• 2:37
  Speaker 4: Does this alter AMD's position in the AI accelerator market
• 2:42
  Speaker 4: in other words, they're closing the gap a little within video?
• 2:47
  Speaker 3: Yeah, Well, I think.
• 2:48
  Speaker 2: That both companies are doing really well and they're doing
• 2:52
  Speaker 2: things a little bit differently.
• 2:54
  Speaker 3: But I think that you're alluding to kind of.
• 2:56
  Speaker 2: The market narrative of AMB was kind of in between
• 2:59
  Speaker 2: kind of Ida on the GPU side and then Broadcom
• 3:03
  Speaker 2: on the custom side. And I think this can help
• 3:06
  Speaker 2: lit the narrative to go from like a second place
• 3:08
  Speaker 2: GPU player to a co developed partner of open Ai
• 3:13
  Speaker 2: on the AI compute side. So I think it positions
• 3:16
  Speaker 2: them well, gives them credibility scale, an additional kind of
• 3:21
  Speaker 2: kind of code development R and D to improve their roadmap.
• 3:24
  Speaker 2: So to me, it definitely is a big positive, and
• 3:28
  Speaker 2: I don't think it's a zero sum game. I mean,
• 3:30
  Speaker 2: I think it just further signifies the demand for AI compute.
• 3:33
  Speaker 2: It's good for the country to build this much capacity
• 3:36
  Speaker 2: because I do think the and payoffs are events.
• 3:40
  Speaker 1: I mean, Tony, we're a new record high for the
• 3:43
  Speaker 1: NASA that one hundred. At one point, MD was at
• 3:45
  Speaker 1: a record high. The valuation is kind of a higher.
• 3:47
  Speaker 1: When I'm looking at your holdings top holding, Apple, Alphabet
• 3:49
  Speaker 1: and video Meta, do you feel confident that these are
• 3:52
  Speaker 1: going to continue to gain in value with this AI story.
• 3:58
  Speaker 2: I think there's a good long term store behind all
• 4:01
  Speaker 2: our holdings, and I.
• 4:03
  Speaker 3: Think a lot of them are beneficiars of AI.
• 4:05
  Speaker 2: They're strong companies that are our great platforms. And as
• 4:09
  Speaker 2: a result, I think that you know, we are entering
• 4:12
  Speaker 2: this inflection and AI driving a ton of productivity. You
• 4:15
  Speaker 2: think about you know, output being productivity and labor. I
• 4:19
  Speaker 2: think pundit is going up and labor is going to
• 4:22
  Speaker 2: be relatively uncapped. I think as a limiting factors. So
• 4:26
  Speaker 2: to me, I think it's exciting. It's never been a
• 4:29
  Speaker 2: better time to be a tech investor. I think there's
• 4:31
  Speaker 2: just so much change in dynamism. So I'm excited for
• 4:35
  Speaker 2: the multi year.
• 4:35
  Speaker 4: Here, Tony, if your humor me please. My column today
• 4:40
  Speaker 4: was about all of the debt deals that are underpinning
• 4:42
  Speaker 4: the AI infrastructure build out that we're seeing. You know,
• 4:47
  Speaker 4: everyone seems to have a different comfort level with that
• 4:49
  Speaker 4: as well. How sanguine are you about the role of
• 4:52
  Speaker 4: debt in what we're seeing?
• 4:55
  Speaker 2: Yeah, I think that you know, the key signal here
• 4:57
  Speaker 2: is you know, what what is AI capacity? This AI
• 5:02
  Speaker 2: I'm for sure capacity worth? And what's the useful life?
• 5:05
  Speaker 2: I think a few years ago we're debating is the
• 5:08
  Speaker 2: useful life from the GPU data center.
• 5:10
  Speaker 3: Three or four years? And I think that was just
• 5:12
  Speaker 3: too short.
• 5:13
  Speaker 2: You look at a lot of the GPUs, you know,
• 5:16
  Speaker 2: from seven eight years ago, they're still being fully utilized
• 5:19
  Speaker 2: because the AI workloads continue to evolve. And then when
• 5:22
  Speaker 2: you fully appreciate these assets, like they're at a price.
• 5:25
  Speaker 3: Point that could make sense for other lms be running
• 5:28
  Speaker 3: on them.
• 5:29
  Speaker 2: And so I think that you know, the useful life
• 5:31
  Speaker 2: of these gps are definitely more than four or five years,
• 5:35
  Speaker 2: and you know there's just more and more use cases.
• 5:39
  Speaker 3: You think about.
• 5:40
  Speaker 2: Robotics, like you know, diagnostics, simulation. Uh, there's just a
• 5:45
  Speaker 2: ton more than we thought there were three years ago,
• 5:48
  Speaker 2: and I think that's what We'll keep the utilization high
• 5:51
  Speaker 2: of these data centers as long as that, you know, continues.
• 5:53
  Speaker 3: I think it makes a lot of sense