Quote · Excess Returns
We Asked GMO’s Head of Asset Allocation Why This Bubble is Easy — But Investors Will Get it Wrong
Where this was said
Debt, circular financing and strange AI deals
At 30:55 · chapter starts 29:33
Discussion of how AI infrastructure financing has shifted from equity to debt, with detailed examples of the OpenAI-AMD and Anthropic-Alphabet-Broadcom deals as signs of circular finance [1] — Ben Inker "OpenAI bought AMD GPUs using AMD warrants worth half the purchase price — effectively a 50% discount disguised as a profitable deal. Anthro…" 32:50 .
OpenAI bought AMD GPUs using AMD warrants worth half the purchase price — effectively a 50% discount disguised as a profitable deal. Anthropic is leasing $36 billion in Alphabet TPUs with Broadcom as a backstop guarantor. Circular finance is back, but at far greater scale than the dot-com era.
OpenAI's deal to buy tens of billions in AMD GPUs was structured so that AMD warrants granted to OpenAI were worth roughly half the purchase price, obscuring what was effectively a 50% discount.
