<div id="readability-page-1"><div><div><p>Renowned short-seller Jim Chanos has publicly questioned the financial benefits of the landmark partnership between <strong>Advanced Micro Devices Inc.</strong> (NASDAQ:AMD) and <strong>OpenAI</strong>, suggesting the deal may not be as lucrative for AMD as it appears.</p><p>In a series of social media posts, Chanos scrutinized the deal’s structure, where AMD is set to receive “tens of billions of dollars in revenue” while providing OpenAI with equity warrants of a similar potential value.</p><p>Check out AMD’s stock price here.</p><h2><strong>Is The AMD-OpenAI Trade-Off Unprofitable?</strong></h2><p>Chanos’s central criticism hinges on this apparent trade-off. “If you are giving up tens of billions of dollars worth of equity warrants, shouldn't this deal bring in more than ‘tens of billions of dollars in revenue for $AMD’?” he asked.</p><p>His comment implies that the net gain for AMD shareholders could be minimal, likening the arrangement to a massive form of “vendor financing,” where a seller subsidizes a buyer’s purchase.</p><h2><strong>Chanos Questions The ‘Organic’ AI Compute Demand</strong></h2><p>The veteran investor further challenged the prevailing market narrative surrounding the artificial intelligence boom.</p><p>He found it contradictory that in a market with supposedly limitless need for computing power, sellers would need to offer such significant incentives. “…don’t you think it’s a bit odd that when the narrative is ‘demand for compute is infinite’, the sellers keep subsidizing the buyers?” Chanos remarked, casting doubt on the organic strength of the demand.</p><h2><strong>ChatGPT Parent OpenAI, AMD Partner In Landmark AI Deal</strong></h2><p>The deal, announced Monday, involves AMD supplying its Instinct GPU accelerators for OpenAI’s next-generation AI infrastructure.</p><p>AMD Chief Financial Officer<strong> Jean Hu </strong>stated the partnership is “expected to deliver tens of billions of dollars in revenue” and be “highly accretive” to adjusted earnings per share.</p><p>Chanos, in his replies on X, also raised concerns about accounting practices, suggesting the true cost of the equity warrants might be obscured in non-GAAP earnings reports.</p><h2><strong>Price Action</strong></h2><p>The announcement sent AMD’s stock soaring over 23.71% to $203.71 per share on Monday, indicating strong investor optimism that contrasts sharply with Chanos’s critical assessment.</p><p>The stock further rose 1.53% in after-hours. AMD was up 68.87% year-to-date and 19.15% over the year.</p><p><strong>Benzinga's Edge Stock Rankings</strong> indicate that AMD maintains a stronger price trend in the short, medium, and long terms. However, the stock's value ranking is relatively poor. Additional performance details are available here.</p><p>The <strong>SPDR S&amp;P 500 ETF Trust </strong>(NYSE:SPY) and <strong>Invesco QQQ Trust ETF </strong>(NASDAQ:QQQ), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, advanced on Monday. The SPY was up 0.36% at $671.61, while the QQQ rose 0.75% to $607.71, according to Benzinga Pro data.</p><p>The futures of the S&amp;P 500, Dow Jones, and Nasdaq 100 indices were lower on Tuesday.</p><ul> <li><strong>Lisa Su Isn’t Worried About AI Hype Fears, Says Big Bet With OpenAI Could Pay Off ‘Tens Of Billions Of Dollars’ — AMD Stock Spikes 1.5% After Hours</strong></li> </ul><p><em><strong>Disclaimer: </strong>This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.</em></p><p><em>Photo courtesy: Poetra.RH via Shutterstock</em></p></div></div></div>

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<p>Renowned short-seller Jim Chanos has raised concerns about AMD's partnership with OpenAI, questioning the financial benefits of the deal. He argues that if AMD is giving up significant equity warrants, the revenue should exceed the projected "tens of billions". Chanos also challenges the narrative of infinite demand for AI computing power, suggesting that the need for subsidies indicates weaker demand. Despite his skepticism, AMD's stock surged over 23% following the announcement, reflecting strong investor optimism.</p>

- Jim Chanos has raised concerns about the financial viability of the partnership between Advanced Micro Devices Inc. (AMD) and OpenAI, questioning the deal's structure and potential profitability for AMD.  
- He argues that if AMD is giving up significant equity warrants, the revenue generated should exceed the value of those warrants, suggesting a minimal net gain for shareholders.  
- Despite Chanos's skepticism, AMD's stock surged over 23% following the announcement, reflecting strong investor optimism about the partnership's potential.

Famed Short-Seller Jim Chanos Questions AMD's Revenue Forecast Following OpenAI Deal: 'Shouldn't This Deal Bring In More… For $AMD?'