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By Sean Peche, Portfolio Manager at Ranmore Fund Management Ltd.

On 22 September, there was the $100bn OpenAI and NVIDIA deal, "to build and deploy at least 10 GW of AI data centres with NVIDIA systems." You'd think, for a $100bn deal, you'd "finalise the details" before announcing it, because the last sentence in the press release read: "NVIDIA and OpenAI look forward to finalising the details of this new phase of strategic partnership in the coming weeks."

Well, during those "coming weeks", OpenAI and AMD announced a "strategic partnership to deploy six gigawatts of AMD GPUs (graphics processing units)."

Now, maybe this doesn't change things, but the accountant in me was a little uncomfortable about Nvidia using all their current $57bn of cash plus $43bn of future profits to "invest" $100bn in a single customer - to use to buy Nvidia chips - on which the "profit" would be valued at 50x by investors.

It's like me setting up a lemonade stand and giving money to a friend to buy my lemonade, getting my own money back, and declaring a "profit". The only difference is my lemonade stand isn't 8% of the S&P 500 index - not that the passive industry seems worried (or looking).

Now, with the AMD deal, OpenAI gets a warrant to buy 160m AMD shares at a knockdown price, which then vest based on deployment and "AMD achieving certain share-price targets"… Huh? OpenAI can't influence the AMD share p......................

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