Tech Brew Ride Home OpenAI’s Big AMD Deal
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Oct 6, 2025 OpenAI's groundbreaking deal with AMD sends the company’s stock soaring. Elon Musk is making a massive $18 billion bet on chips for his ambitious Colossus II project. As AI pushes demand, memory and storage supply are in a crunch, potentially leading to skyrocketing prices for years. Meanwhile, complications arise for OpenAI and Jony Ive as they tackle technical hurdles for a secret AI device. Lastly, the viability of small modular reactors for powering AI data centers comes under scrutiny, raising questions about their economic feasibility.
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OpenAI’s Strategic Bet On AMD
- OpenAI agreed to deploy up to 6 GW of AMD Instinct GPUs and received warrants that could give it ~10% of AMD.
- The deal reduces reliance on NVIDIA and deepens a circular capital-compute ecosystem among a few giants.
AI’s Circular Corporate Economy
- The AI supply chain is circular: chipmakers, cloud builders, and AI firms trade capital, equity, and compute in tight loops.
- Analysts warn the system could strain if any single link weakens, raising systemic risk for the AI buildout.
Elon’s Colossus 2 Chip Gamble
- Sources told the Wall Street Journal that XAI may spend more than $18 billion for ~300,000 NVIDIA chips for Colossus 2 in Memphis.
- Elon Musk aims to finish Colossus 2 despite massive costs and internal unpredictability at XAI.