The renowned short-seller Jim Chanos has publicly questioned the financial benefits of the historical partnership between Advanced Micro Devices Inc. (Nasdaq: AMD) and OpeniSuggesting that the deal may not be as lucrative for AMD as it seems.
In a series of messages on social media, Chanos has investigated the structure of the deal, where AMD will receive “dozens of billions of dollars in income”, while OpenAI offers stocks for a similar potential value.
View the share price of AMD here.
Is the AMD opaai not profitable?
Chanos’ central criticism depends on this apparent assessment. “If you give up dozens of billions of dollars in stock warrants, this deal would then have to yield no more than” dozens of billions of dollars in income for $ AMD? ” he asked.
His remark means that the net profit for AMD shareholders could be minimal, which compares the scheme with a massive form of “seller financing”, in which a seller subsidizes the purchase of a buyer.
See also: Chatgpt Parent OpenAI, AMD partner in Landmark AI deal
Chanos puts the ‘organic’ AI calculation of the question
The experienced investor also challenged the prevailing market story around the tree of artificial intelligence.
He discovered that it is contradictory that in a market with so -called unlimited need for computing power, sellers should offer such considerable stimuli. “… don’t you think it’s a bit strange that when the story is” a demand for calculation is infinite “, the sellers continue to subsidize the buyers?” Chanos noticed and doubted the organic power of question.
Chatgpt Ouder OpenAI, AMD partner in Landmark AI -Deal
The deal, announced Monday, means that AMD supplies its Instinct GPU accelerators for the next generation of AI infrastructure of OpenAi.
AMD Chief Financial Officer Jeans stated that the partnership “is expected to deliver dozens of billions of dollars in income” and “very accretion” will be for adapted profit per share.
Chanos, in his answers to X, also issued concern about accounting practices, which suggests that the actual costs of the stock complies can be obscured in non-Gaap-winning reports.
Price action
The announcement sent the shares of AMD on Monday by more than 23.71% to $ 203.71 per share, which indicates a strong investor optimism that strongly contrasts with the critical assessment of Chanos.
The stock continued by 1.53% after hour. AMD rose from 68.87% years to date and 19.15% during the year.
Benzinga’s Edge Stock Rankings Indicate that AMD maintains a stronger price trend in the short, medium and long conditions. However, the value of the share is relatively poor. Extra performance data is available here.
The SPDR S&P 500 ETF Trust (NYSE:Spy) and Invesco QQQ Trust ETF (Nasdaq: QQQ), which follow the S&P 500 Index and Nasdaq 100 index on Monday respectively. The spy rose by 0.36% to $ 671.61, while according to 0.75% the QQQ rose to $ 607.71, according to Petrol facts.
The futures of the indices of S&P 500, Dow Jones and Nasdaq 100 were lower on Tuesday.
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