Get Excited for 2025’s AI Spending Boom—Breaking News: U.S. Teams Up with AMD in a Thrilling $1 Billion Partnership (Details Inside) By: Stock Market Charlie

Exciting news! The U.S. has teamed up with AMD in a thrilling $1 billion partnership to build supercomputers powered by AMD's cutting-edge artificial intelligence chips, the chipmaker revealed. This is the latest in a series of groundbreaking billion-dollar AI deals this year, as Wall Street eagerly predicts a surge in global spending in the years ahead.

AMD CEO Lisa Su proudly showcases a cutting-edge microchip during a presentation, emphasizing innovation in the tech industry.

Timeline

Oct. 27 Exciting news! The Energy Department has teamed up with AMD to create not one, but two AI-powered supercomputers in a groundbreaking $1 billion partnership, according to AMD. These systems are set to “drive breakthroughs in science, energy, and national security.”

The first supercomputer, “Lux,” is anticipated to be operational within the next six months, while the second, “Discovery,” is on track for completion by 2029.

Oct. 23 Big announcement from Google! They're set to supply up to 1 million of their AI chips to Anthropic in a deal that could be worth tens of billions of dollars.

Oct. 16 Oracle executives have confirmed an incredible $20 billion cloud-computing deal with Meta, where Oracle will provide Meta with the cloud computing capacity needed for training and deploying AI models.

Oct. 14 Oracle’s cloud business is gearing up to deploy tens of thousands of AMD’s newest AI chips starting in 2026, with plans to expand this exciting partnership in 2027 and beyond, although financial terms remain undisclosed.

Oct. 13 OpenAI has announced a thrilling partnership with Broadcom, aiming to design and deploy its own AI chips and jointly build and deploy a whopping 10 gigawatts of custom AI accelerators to speed up AI and machine-learning tasks. Financial details are still under wraps.

Oct. 6 OpenAI and AMD have struck a deal that could see OpenAI acquiring a 10% stake in the chipmaker, whose market cap has skyrocketed to nearly $188 billion. OpenAI plans to deploy up to six gigawatts of AMD’s graphics processing units over the coming years.

Sept. 25 Cloud infrastructure firm CoreWeave has expanded its deal with OpenAI by up to $6.5 billion, bringing the total value of their partnership to roughly $22.4 billion. CoreWeave will provide OpenAI with AI data centers and cloud tech over the next five years.

Sept. 22 OpenAI and Nvidia have announced a phenomenal partnership, including a $100 billion investment from Nvidia into OpenAI. OpenAI plans to use at least 10 gigawatts of Nvidia’s systems for AI model training infrastructure.

Sept. 15 In a regulatory filing, CoreWeave revealed that Nvidia agreed to purchase cloud services valued at roughly $6.3 billion through 2032, ensuring Nvidia buys any excess cloud computing not used by its customers.

Sept. 10 OpenAI has inked a massive $300 billion contract with Oracle to purchase computing power over the next five years, as reported by the Wall Street Journal. Oracle will provide approximately 4.5 gigawatts of power capacity.

Aug. 22 A major announcement from President Donald Trump: Intel has agreed to give the U.S. a 10% stake in the company, valued at approximately $10 billion, making the federal government the third-largest shareholder in the company after Trump's earlier call for Intel’s CEO Lip-Bu Tan to resign.

Aug. 10 Nvidia and AMD have agreed to pay the U.S. government 15% of revenues from chip sales in China in exchange for export licenses, following Trump’s announcement of a 100% tariff on semiconductor and chip imports, according to the Financial Times.

July 14 Google is set to invest a staggering $25 billion in data centers and AI infrastructure over the next two years, aiming to expand “energy capacity, innovation, and opportunity in the AI-driven economy.”

June 30 Oracle disclosed in a Securities and Exchange Commission filing multiple “large” cloud services agreements, including a $30 billion deal with OpenAI.

May 23 Oracle announced plans to purchase $40 billion worth of Nvidia’s AI chips to power OpenAI’s data center in Abilene, Texas, marking the first project for Stargate, as reported by the Financial Times.

Jan. 21 President Trump announced the formation of “Stargate,” a new company created by OpenAI, SoftBank, and Oracle. Trump hailed it as the “largest AI infrastructure project in history,” with plans for a $500 billion investment to develop AI infrastructure in the U.S. and create 100,000 jobs.

AI Spending Weaves an Exciting Web of Deals!

AI firms have been intricately connected for years through a thrilling series of investments in one another, starting with Microsoft's groundbreaking $1 billion equity deal with OpenAI in July 2019. This dynamic partnership skyrocketed in January 2023 when Microsoft's investment soared to an impressive $14 billion, making Microsoft OpenAI's exclusive provider of cloud computing services. Amazon made waves by initially investing up to $4 billion in Anthropic in September 2023 and then doubling down with another $4 billion in November 2024, complementing Google's bold $2 billion commitment to Anthropic announced in October 2023 and an additional $1 billion earlier this year. SoftBank took the lead in OpenAI's colossal $40 billion funding round earlier this year and in August enthusiastically poured $2 billion into Nvidia, which in turn invested an astounding $5 billion and $100 billion into Intel and OpenAI, respectively, in a pair of electrifying deals the following month. While several economists have cautioned that this investment web resembles the thrilling deals of the late 1990s dot-com era, they suggest the funding flow could be overinflating the market. CoreWeave's market capitalization has skyrocketed to nearly $67 billion since its initial public offering in March, with its shares soaring 221% over the last six months as the firm dives into multiple partnerships. Some market researchers have pointed out that many AI investments are still on the verge of delivering results: A study from the Massachusetts Institute of Technology found that 95% of the 300 surveyed AI developments have yet to turn a profit, despite companies investing a combined $400 billion.

Big Number

$375 billion. That's the staggering amount global annual AI spending is expected to reach by the end of the year, according to projections from UBS. The investment bank predicts AI spending will soar to $500 billion by 2026, with spending on power and resources for electricity demand expected to top $3 trillion annually by 2030. Companies are set to invest a combined $6.7 trillion on data centers through 2030, with most expenditures fueling systems based around AI chips, according to estimates from the consulting firm McKinsey.

Is There An AI Bubble?

Excitement is soaring as economists sound the alarm about the surge of investments flooding into AI, hinting at a potential shake-up in the global market! Some are even drawing parallels to the thrilling yet tumultuous days of the 2000 dot-com boom and bust. Earlier this month, Bank of America unveiled survey results showing that a whopping 54% of investors believe AI-related assets are bubbling over with hype, suggesting these tech stocks might be overhyped and could face a dramatic downturn. Bryan Yeo, the visionary chief investment officer at Singapore's sovereign wealth fund GIC, highlighted that AI startups are attracting unprecedented funding, and he pointed out that any company sporting an "AI label" might be wildly overvalued. Forbes dived into the debate by consulting several AI chatbots, including OpenAI’s ChatGPT and xAI’s Grok, to get their take on the existence of an AI bubble. Grok and ChatGPT confidently indicated a bubble is indeed present, while Perplexity and Microsoft Copilot hinted at signs of an "emerging" bubble. Meanwhile, Meta AI and Gemini found the bubble status to be "debatable." Most chatbots acknowledged the electrifying yet potentially unsustainable investor enthusiasm, while reassuring us that there's nothing amiss with the technology or AI-related products themselves.

Best Regards,

Stock Market Charlie