We’re living in strange times.

AI hype has reached a point where the rules of finance don’t always seem to apply.

This morning, AMD’s stock jumped 30% after reports that OpenAI plans to take a 10% stake in the chipmaker.

On the surface, that sounds like a straightforward win.

OpenAI gets a piece of one of the world’s biggest chipmakers.

But this deal isn’t as clean cut as it seems.

When you look a little closer, the math gets weird, the funding gets murky, and the timing raises eyebrows.

First: A “Dilutive” Deal That’s Somehow Positive

On Friday, AMD’s market cap was about $270 billion.

To keep the math simple, imagine there are 100 shares outstanding, each worth $2.7 billion in total market value.

Now, OpenAI comes in and buys a 10% stake.

That means AMD would issue new shares (now 110 total) making each one worth only about $2.45 billion.

That’s why stocks typically fall on news of equity deals.

More shares means each one is worth less.

But not this time.

AMD is up 30% this morning as I type this.

Its market cap just jumped to around $350 billion, more than offsetting the dilution.

Investors see OpenAI’s involvement as strategically transformative.

This partnership could pull AMD deeper into the AI hardware ecosystem alongside Nvidia and other top players.

It’s great for investors if it works.

But it’s also a sign of the times – where anything tied to AI, no matter how expensive or speculative, can ignite billions in new market value overnight.

Second: How Is OpenAI Paying for All This?

This is where things get murkier.

OpenAI is still a private company that loses money.

Its operations are fueled largely through venture capital and partnerships with other AI ecosystem players.

Yet its spending spree is extraordinary.

• A $300 billion deal with Oracle to purchase cloud computing power over five years.

• Participation in the $500 billion “Stargate” data center buildout.

• $1 million+ signing bonuses for engineers.

• And now, a multi-billion-dollar investment in AMD.

That’s a lot of cash for a company that loses tens of billions of dollars each year.

So where’s the money coming from?

It’s important to know that Open AI CEO Sam Altman is a master at playing the game.

In many ways, he’s cut from the same cloth as Elon Musk – part visionary, part tactician, and a relentless fundraiser.

Before OpenAI, Altman ran Y Combinator, the most successful startup accelerator in the world and top competitor to my previous employer.

Think of YC as a startup “school” that teaches founders how to build startup companies and raise money from investors.

Altman is behind or connected to some of Silicon Valley’s largest unicorns and investors. He knows how to raise money better than anyone.

However, big ambitions are fine when capital is abundant.

But if the market cools or investors pull back, those commitments could become dangerous liabilities.

Especially when your business model relies on rapidly scaling infrastructure that burns cash by the second.

Third: The Nvidia Connection and the Questionable Timing

Just two weeks ago, OpenAI announced that Nvidia would invest $100 billion in the company over the next decade.

OpenAI planned to use that cash to buy Nvidia chips and build out up to 10 gigawatts of AI computing power.

But that deal isn’t finalized.

There are no filings, no regulatory disclosures, and nothing close to a signed agreement yet.

And now OpenAI is reportedly taking a stake in Nvidia’s biggest rival?

That’s not just bold, it’s borderline confrontational.

For years, Nvidia CEO Jensen Huang has been the single most important figure in AI infrastructure.

Every major model, including OpenAI’s, runs on his company’s GPUs.

If OpenAI starts cozying up to AMD, it’s sending a very public message: we’re not married to Nvidia anymore.

That might be smart negotiation. Or it might burn a bridge with the company that made OpenAI possible in the first place.

Important Note: Let’s Play By Today’s Rules

OpenAI says it’s on pace to generate just $13 billion in revenue this year, and CEO Sam Altman has been vocal about shifting focus toward profitable tasks built on top of its models.

Still, the spending is eye-popping and the strategy increasingly complex.

I’m not calling the top here.

I still own Nvidia in my personal portfolio and I believe this AI revolution has years of runway ahead.

(Remember, reasoning is the next frontier and after that comes physical AI. Both will demand far more computing power than what today’s systems can handle.)

But it’s important to understand the risks and identify the irregularities in today’s market.

Right now the rules of finance don’t always seem to apply.

But fighting that reality won’t make it any less true.

Let’s not punch air and complain that this isn’t how things are supposed to work.

The fact is, this is how today’s market works.

Let’s adapt, stay rational, and keep finding opportunities others overlook.

After all, we’ve got a mission to accomplish.