In recent commentary, CNBC’s Jim Cramer highlighted the growing artificial intelligence arms race, particularly emphasizing OpenAI’s latest strategic partnership with semiconductor manufacturer AMD. Cramer believes this move positions OpenAI to become a formidable competitor in the tech landscape. “The hyperscalers are all vulnerable if OpenAI gets this computing power,” he asserted, referring to the implications of the partnership for major tech companies.
OpenAI and AMD revealed on Monday that they have entered into a deal that could grant OpenAI a 10% stake in AMD. As part of this agreement, OpenAI plans to deploy 6 gigawatts of AMD GPUs over several years and across multiple hardware generations. Although OpenAI indicated the agreement is worth billions, specific financial figures were not disclosed.
Following this announcement, AMD’s stock experienced a significant surge, finishing the day up 23.71%, which contributed to record highs for both the S&P 500 and the Nasdaq Composite. The stock continued its upward trajectory in after-hours trading.
Cramer expressed strong confidence in the potential of the AI boom, suggesting that major market players are likely to benefit from their substantial investments, despite some skepticism on Wall Street regarding the sustainability of the hype surrounding AI technology. He drew attention to a similar alignment between OpenAI and Nvidia, referring to Nvidia as a $4 trillion chipmaker that has been central to the advancement of AI.
Cramer suggested that OpenAI views AMD’s chips as comparable to Nvidia’s offerings, emphasizing the urgent need for computing power to address overwhelming market demand. He noted the competitive landscape in which companies like Meta, Microsoft, Google, Amazon, and Tesla each pursue AI capabilities relevant to their respective sectors, whether it’s social media, enterprise solutions, search, retail, or autonomous technologies.
Moreover, Cramer pointed out that the major tech firms within the hyperscaler category are likely unconcerned about the heavy financial investments necessary to develop AI solutions, as they have substantial resources at their disposal. He remarked, “After today’s announcement by OpenAI, I think they’re right to be afraid. They’re right to keep spending,” indicating that the competitive dynamics necessitate aggressive investment strategies in AI technologies.
As of now, neither OpenAI nor AMD has provided comment regarding the specifics of their collaboration.
