AMD–OpenAI Deal Sends Wall Street to the Moon
Amid the growing euphoria, Amazon founder Jeff Bezos warned of a possible “AI bubble” during the Tech Week conference in Turin, Italy.
Quick overview
- The New York Stock Exchange closed mixed, with the S&P 500 and Nasdaq hitting record highs, driven by a 23.7% surge in AMD shares following a supply agreement with OpenAI.
- The Dow Jones Industrial Average fell 0.1%, while the S&P 500 and Nasdaq rose by 0.4% and 0.7%, respectively, amid concerns over the ongoing U.S. government shutdown.
- OpenAI's partnership with AMD aims to enhance AI capabilities by securing a significant supply of GPUs, with both companies expressing optimism about the collaboration's potential.
- Jeff Bezos cautioned about a potential AI bubble, drawing parallels to the biotech bubble of 2000, while acknowledging the long-term benefits of AI technology.
The New York Stock Exchange closed mixed on Monday, with the S&P 500 and Nasdaq Composite climbing to fresh record highs.
The rally was driven by a massive surge in AMD shares (+23.7%) after the chipmaker announced a major supply agreement with OpenAI, the artificial intelligence firm behind ChatGPT. The deal overshadowed concerns surrounding the ongoing U.S. government shutdown, which continues to delay the release of key economic data.
The Dow Jones Industrial Average slipped 0.1% to 46,694.97 points, while the S&P 500 gained 0.4% to 6,740.18 points, and the Nasdaq Composite rose 0.7% to 22,941.67 points.
Government Shutdown Looms Over Economic Outlook
The suspension of official economic reports has increased investor scrutiny of corporate earnings and private data. Analysts warned of “darkening clouds” over employment and inflation prospects as markets await the next Federal Reserve meeting in October.
Despite limited official data, traders continue to price in at least two additional rate cuts by the Fed this year. Meanwhile, tensions between Republicans and Democrats remain high, with the White House warning of potential mass federal layoffs if negotiations fail.
AMD–OpenAI Alliance Sparks AI Optimism
California-based OpenAI announced a strategic partnership with AMD, under which it will purchase a massive volume of GPUs—the graphics processing units essential for AI model training. The agreement also includes OpenAI taking a stake in AMD.
“This partnership is a crucial step in building the computational capacity needed to unlock AI’s full potential,” said Sam Altman, CEO of OpenAI. “AMD’s leadership in high-performance chips will help accelerate progress and make advanced AI benefits accessible to all.”
AMD CEO Lisa Su added that the alliance creates “a true win-win situation,” advancing the world’s most ambitious AI development efforts while strengthening the broader AI ecosystem.
Jeff Bezos Warns of a Potential AI Bubble
Amid the growing euphoria, Amazon founder Jeff Bezos warned of a possible “AI bubble” during the Tech Week conference in Turin, Italy.
“Investors don’t usually hand $2 billion to a six-person team with no product—and yet that’s happening right now,” Bezos said, comparing today’s AI boom to the biotech bubble of 2000, which collapsed shortly after a surge in valuations.
Still, Bezos acknowledged that while speculative excess is possible, the long-term benefits of AI will be immense.
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