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AMD CEO Lisa Su should hope Nvidia CEO Jensen Huang takes digs at her more often. After Huang turned up on CNBC on Wednesday morning—where he discussed both the AMD-OpenAI chip deal announced on Monday and Nvidia's own dealmaking—AMD’s stock rallied 11%! The stock, which had jumped 24% on Monday but only inched up a bit on Tuesday, is now up 43% this week. Perhaps Huang inadvertently brought AMD’s success in getting its foot in the artificial intelligence chip door back to the forefront of investors’ minds.
Whatever the reason for Wednesday’s rally, Huang’s comments suggested he’s a little irritated that Nvidia now has to share OpenAI’s business with AMD. To recap: The smaller chipmaker is selling OpenAI its newest AI chip, to be put to work starting in the second half of next year, and is giving the ChatGPT maker warrants for up to 10% of the company as part of the deal. Huang’s take on this was that considering how AMD was “so excited about their next-generation product, I’m surprised that they would give away 10% of the company before they even built it.”
Huang needn’t fret. AMD will likely remain a distant rival. Su told analysts on Monday the OpenAI deal would add “double-digit billions of annual incremental data center AI revenue once it ramps” and could help AMD attract other new customers as well. Even so, AMD’s annual revenue will still be relatively small. Analysts are projecting AMD’s revenue will more than double to $54.5 billion in 2027 from $25.7 billion last year, according to S&P Global Market Intelligence. In comparison, analysts expect Nvidia’s revenue to hit $323.7 billion in its fiscal 2028 year, ending in January 2028, from $130.5 billion last fiscal year.
Still, the OpenAI agreement is unquestionably a big deal for AMD and Su. As Austin Lyons, a senior analyst at consulting firm Creative Strategies, noted on The Information’s TITV on Monday, OpenAI CEO Sam Altman had appeared at an AMD conference earlier this year, where he talked on stage about how OpenAI teams had been working closely with AMD “to make sure that OpenAI can run their compute on AMD’s” chips. The deal meant AMD is “really starting to become competitive,” Lyons said. The AI chip market is big enough for both Nvidia and AMD.
SoftBank’s Purchases
SoftBank CEO Masayoshi Son is back doing what he loves most—buying stuff. On Wednesday, SoftBank announced it was paying $5.375 billion to buy Swiss firm ABB’s robotics business. That follows its agreement to buy chip design firm Ampere for $6.5 billion announced in March.
The ABB business doesn’t appear too healthy. Financial details disclosed by SoftBank showed the robotics unit’s revenue falling 7% in 2024, putting it at around its 2022 level. Earnings also fell. Wonderful!
In Other News
• Elon Musk and his social media site, X, formerly known as Twitter, have settled a lawsuit from four top Twitter executives that Musk fired after acquiring the company in 2022.
• Apple and Meta are on the verge of settling antitrust cases with EU regulators over alleged violations of the bloc’s Digital Markets Act, the Financial Times reported.
• Data-streaming platform Confluent is exploring a sale after receiving takeover interest, Reuters reported.
Today on The Information’s TITV
Check out today’s episode of TITV in which we get into the business of longevity with Dr. Jordan Shlain and John Battelle.
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