"OpenAI's multibillion-dollar deals with chip makers Nvidia and AMD are the latest reason for pause about the sustainability of vast investments in artificial intelligence. Here we answer some questions about what these deals say about the AI stock market frenzy. Some commentators are concerned by the circular nature of the deals. Under the terms of the Nvidia transaction, OpenAI will pay Nvidia in cash for chips, and Nvidia will invest in OpenAI for non-controlling shares."
"The AMD deal also enmeshes OpenAI with another chip maker alongside Nvidia. Under the deal, OpenAI will use hundreds of thousands of AMD chips in its datacentres the central nervous systems of AI tools such as ChatGPT and will have an opportunity to buy 10% of AMD. All of this is being driven by the thirst of OpenAI and its peers for as much computing power as possible to drive their models to ever greater performance breakthroughs as well as to meet demand."
OpenAI has multibillion-dollar deals with Nvidia and AMD that combine large chip purchases with equity stakes. Under the Nvidia deal, OpenAI will pay cash for chips while Nvidia takes non-controlling shares in OpenAI. Under the AMD agreement, OpenAI will use hundreds of thousands of AMD chips in its datacentres and may buy 10% of AMD. The arrangements create circular financial flows that echo vendor financing and some turn-of-the-millennium telecom supplier practices, raising concerns about sustainability. Soaring valuations at AI companies accompany the deals, with OpenAI pegged at $500bn compared with $157bn months earlier, intensifying bubble worries.
Read at www.theguardian.com
Unable to calculate read time
Collection
[
|
...
]