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OpenAI’s investment in Advanced Micro Devices announced Monday is the latest deal to reignite enthusiasm around the AI investing trend, sparking a huge rally in shares of the chipmaker involved. But some analysts and investors have been raising eyebrows at the kinds of deals being hatched, seeing similarities to the vendor financing agreements that happened in the latter stages of the Dotcom Bubble. The buzzy ChatGPT startup could end up with a 10% stake in AMD under the agreement. OpenAI will deploy as many as 6 gigawats of AMD Instinct graphics processing units over a multiyear period. AMD issued a warrant to OpenAI for up to 160 million shares. Shares of AMD soared more than 30% in early trading on Monday, while well-known competitor Nvidia ticked down nearly 2%. The AMD deal comes just weeks after Nvidia announced it would invest up to $100 billion in OpenAI as it looked to expand data center capabilities. “When you see the money going in a circle, it raises some flags,” said Chris Caso of Wolfe Research on CNBC’s “Squawk Box” on Monday. AMD 1D mountain AMD, 1-day Caso pointed out that OpenAI is using warrants to help finance the deal. The analyst said it can draw some parallels to vendor financing concerns during the Dotcom Bubble, though he noted that this situation is “different” than what happened during that period in some ways. Nvidia, on the other hand, made its investment into OpenAI in cash, he said. However, some on Wall Street argued that the deal could be viewed as fitting the bill for a circular deal, with Nvidia giving OpenAI money to then have its chips bought by the startup. Caso said he’s previously liked Nvidia the best as a stock because its valuation has remained constant and its market share isn’t a concern. Yet he said the announcement this morning forecasting tens of billions of revenue for AMD is a “big deal.” Both stocks have surged more than 35% in 2025. “For Nvidia, we’re very comfortable,” Caso said. “The valuation is reasonable. They’re right in the middle of this. I find it hard to find a scenario where AI works and Nvidia doesn’t work.” Nvidia’s OpenAI deal had propelled the stock market to all-time highs last month. Stocks popped in early Monday trading following OpenAI’s AMD investment.
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