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Jim Cramer says OpenAI might be developing an edge after new AMD deal
CNBC’s Jim Cramer opined on the accelerating artificial intelligence arms race, saying OpenAI’s latest deal with chipmaker AMD makes the ChatGPT owner more competitive.
“The hyperscalers are all vulnerable if OpenAI gets this computing power,” he said. “And given the number of chips it’s buying, I think this company can go after everybody’s business.”
The two companies announced Monday they reached a deal that could see OpenAI take a 10% stake in AMD. OpenAI said it would deploy 6 gigawatts of AMD’s GPUs over multiple years and across multiple generations of hardware. OpenAI said the agreement was worth billions but did not disclose an exact dollar amount.
AMD soared during the day’s session in response to the news, helping to propel the S&P 500 and the Nasdaq Composite to record highs. The stock finished up 23.71% and continued to rise in extended trading.
Cramer expressed faith in the legitimacy of the AI boom, saying he believes its major players will reap the rewards of their lofty investments — even as many on Wall Street worry the hype is overblown, and Big Tech is wasting money.
Cramer noted that OpenAI has made a similar deal with Nvidia, a $4 trillion chipmaker that is one of the biggest drivers of the AI boom. He suggested OpenAI “seems to view AMD’s chips as equal to Nvidia’s,” and he said the company “needed computing power to meet the demand, because the demand is overwhelming them.”
According to Cramer, hyperscalers don’t want to fall behind in the AI race, and each giant has its own vertical that needs AI. Meta has social media with advertisements, he continued, while Microsoft has the enterprise, Google has search, Amazon has retail and Tesla has robotics and autonomous driving. He also said Big Tech largely isn’t concerned about huge spending because the outfits “all have very deep pockets.”
“After today’s announcement by OpenAI, I think they’re right to be afraid. They’re right to keep spending,” Cramer said of the hyperscalers. “They have to, and that’s what OpenAI’s partnership with AMD is all about. They want to challenge every one of these verticals – they need every bit of computing, they need both Nvidia and AMD.”
OpenAI and AMD did not immediately respond to request for comment.
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