AMD *JUST* Accidentally EXPOSED the Ponzi.

same day that AMD makes a major deal

with Open AI, leading a lot of people to

say this is peak bubble and peak

circular, which we'll talk about exactly

what's going on there. There's a note in

Bloomberg about comparisons from today

all the way back to 1929.

See, in 1929, the Dow Jones fell 17% as

we started entering the Great

Depression.

A lot of people are like, "Ah, 7%. Who

cares?" The market was up double in just

the year prior to that. And we're only

up 73% on the S&P 500 since 2023. So,

we're not up as much. And it took two

years. So, you know, we're not we're not

well, of course not. But, of course,

well, we fell 17% in 2029. That was just

the beginning of a slow, drawn out death

of the stock market. And the circular

financing of what's happening today with

the AMD deal has a lot of people

scratching their heads wondering, "OMG."

After all, in 1930, the Dow was down

33%.

By 1931, it was down 50%, by 1932, it

was down 80%

from its peak. Imagine you're investing

in the Q's today at, you know, 607 and

it falls 80%. Well, 607 * 0.2 would

bring you down to $121

on the cues. Just to make that relatable

to some of the numbers that we're facing

today, if you take the S&P 500, which is

trading for 6,4 $6,741,

multiply that by 0.2, you'd be at $1,348

on the S&P 500 if we had an 80% decline,

just like what happened in 1929 to 1932.

Now, that ended up leading to an

explosion of bank failures. You had

these crazy tariffs that were instituted

in 1930. Good thing we don't make stupid

moves like that.

We had a belief in new technologies like

electrification, vacuum cleaners,

movies, radio, cars. You had radio

stocks going from a $150 per, you know,

stock per share to $85 per share. You

can look up RCA and those companies are

dawn today.

Uh, and of course back then you had a

lot of fraud and insider trading. Like

back then you had a lot of painting the

tape. Fortunately today you don't have

painting the tape because it's illegal.

But I I guess insider trading some say

is exactly still what happens given that

the Kabesi letter says here on October

2nd users on X began noting unusual

options activity in AMD.

Over $6 million worth of longdated call

options were purchased and flows into

AMD stock were strong. One user

explicitly said they bet AMD just signed

a multi-billion dollar deal to support

GPUs to OpenAI.

4 days later, OpenAI and AMD announced a

deal that will generate tens of billions

of dollars in new revenue. Of course, I

I thought the grifting was only possible

in a certain property on Pennsylvania

Avenue, not all over the stock market.

But apparently, it's possible all over

the stock market. And this is where we

got to talk about the potential circular

nature of these investments. And is

there any risk to all of this? Well,

let's figure it out. So, here we go.

Let's understand exactly how this all

breaks down. So, I'm going to try to

walk through this as simply as possible.

So, the first thing we have to

understand is that Nvidia

just made a commitment that they will

invest $10 billion into OpenAI for every

gigawatt that is deployed. Okay, this is

going to be a little hard to follow, so

I'm just going to walk you through it

here one step at a time. Nvidia will

invest $10 billion once the first

gigawatt is deployed. And then every

next gigawatt they'll do another10

billion dollars for a total of hundred

billion dollars. Now when is the first

gigawatt expected to be deployed? Well,

open AAI tells us. Here's the September

22nd press release. And if we scroll

down right here, ah the first gigawatt

of Nvidia systems will be deployed in

the second half of 2026 on Nvidia's Vera

Rubin platform. Ah, okay. Got it. All

right. So let's write that down. So the

first gigawatt will be deployed in the

second half of 2026. Okay, got it. Now

when that first gigawatt is deployed,

what happens then? Well, then $10

billion of investment goes to OpenAI.

Okay, so now OpenAI gets a bunch of new

cash. And what is Open AI now promising

that they're going to do? Well, uh, in

the second half, Open Door or Open Door,

Open AAI is expecting to invest with AMD

into a new deployment of at least 1

gawatt of energy starting in the second

half of 2026.

That's because today we heard that there

was a strategic partnership announced

between AMD and OpenAI where they're

going to deploy 6 gawatt of AMD GPUs.

Listen to this. You can't make this up.

The first gigawatt deployment of AMD is

set to begin in the second half of 2026.

So let let me recap that for a moment.

Okay, AMD is not in the picture and you

got Nvidia and Open Door. Nvidia says,

"Hey, we'll invest10 billion dollars

into OpenAI when we deploy this new

gigawatt expected to be done in the

second half of 2026." Then OpenAI is

like, "Okay, hey AMD, you want to start

construction once we have this inflow of

10 billion from Nvidia into a

gigafactory or, you know, a gigawatt

factory? I'm thinking Tesla here. Uh, in

the second half of 2026, we'll start

that." It's like, "Yeah, let's do that."

You see the circle building so far? And

I'm not making this stuff up. These

they're literally writing it here on the

Nvidia OpenAI deal. We will deploy it in

the second half. And on the AMD OpenAI

deal, we will begin in the second half

of 2026. It's literally like the AMD

deal is waiting for the Nvidia deal to

be done or progressed. So the money from

Nvidia goes to OpenAI which can then go

to AMD. But it gets even more crazy than

that because after that money gets

deployed then AMD gets revenue right

because AMD is going to sell chips to uh

open AAI but who also gets money well

Nvidia is also getting money because

their data centers are getting completed

with open. both deals are going at the

same time, right? But then it gets

really circular because the more money

Nvidia gets, the more money Nvidia can

keep putting into OpenAI to do the

second gigawatt, the third gigawatt, the

fourth gigawatt, the fifth, all the way

up to 10, right? What does AMD do when

they get money? Well, when AMD gets

money, AMD's stock price is going to go

up. But what's crazy is Open AAI is

going to have ownership in AMD.

And if OpenAI has ownership in AMD and

AMD stock goes up and Nvidia has

ownership in OpenAI, then Nvidia

directly benefits from AMD stock going

up, which then means there's more money

for Nvidia to do more deals, which if

Nvidia does the second and third

gigawatt of the more of more deals, then

technically you could go back to AMD and

you could go do the second gigawatt, the

third gigawatt, the fourth gigawatt, and

just always be like 6 months behind the

Nvidia deal, just like they're blatantly

telling you here again, deployed in the

second half, starting in the second

half, and then it'll be the second

gigawatt, the third gigawatt, and the

cycle is literally just a giant

circle based on stock price at one point

because of this AMD commitment because

the AMD commitment Uh the deal is based

on Nvidia hitting certain stock price

tanches which is wild because

AMD all right this is something like

let's back back off the circle for a

moment. You need to understand this

about AMD. AMD does not have as big of

PP

as Nvidia. That's just the reality.

Nvidia has much larger PB.

Let me prove it to you.

on screen.

AMD has a gross margin of 39.8%.

Nvidia has a gross margin that's nearly

twice as large, 72%.

That's called big pricing power. But

then when you look at the net income,

AMD has net income this last year of

11.3%. So their net margin is 11.3%.

Last year is only 4.5%. But even if we

look at the 11.3%, it's still 1ifth of

Nvidia's net income. Nvidia smokes AMD's

pricing power because the margins are

insane. The numbers don't lie. This

isn't me judging someone else's PP. I

don't do that. I don't judge other

people. I just read the financials and

the PP shows itself. I can measure the

PP by going to sec.gov.

It's really simple.

So when we understand that Nvidia has

really big pee pee here, why is AMD

giving up 10% of their company? Because

they have to. It's branding. Now Lisa

Sue can tell everybody, "Hey, look,

OpenAI, the largest AI company in the

world, is betting big on AMD." They're

giving up 10% of their business. But

they're doing that because they want to

use it as marketing to get more deals

with other companies. Maybe Anthropic

will be next or maybe Microsoft or what.

Who knows? All these other companies

will come around because of the

branding. Some of this is evidenced by

the fact that when Lisa Sue was on

Bloomberg this morning, she was asked,

"Oh, so where are these data centers

going to be, Lisa Sue?" And she's like,

"Oh,

oh, where? Oh, well, the world will

actually need data centers everywhere.

So they will be in diversified locations

to be determined.

You can't make that stuff up. That's

exactly what happened. And it's because

you don't really have to make your plans

yet at AMD because you're sort of kind

of at this point it feels like

contingent on the Nvidia buildout

because once the Nvidia buildout

happens, OpenAI gets $10 billion of

cash. Now OpenAI doesn't really have

cash. OpenAI is expecting revenues of

about 12.7 billion this year, but

they're also expecting to be a money

loser between now and probably 2030,

expecting to blow over a hundred billion

of expenses themselves on either

training AI or AI buildouts or whatever.

And these are expectations we're getting

reported by the information. So, a lot

of these insider funding round leaks and

more.

So, what stage of the cycle does all

this kind of crap put us at? Well, we

know this is a giant circle. Again,

OpenAI

gets investments from Nvidia

to go build out factories to go buy

Nvidia chips.

The more money Nvidia gets, the more

they can reinvest back into OpenAI.

OpenAI

signs deals following those investments

with AMD,

giving AMD shares based on the stock

doing well. AMD gets those share or gets

that, you know, uh or sorry, Open Door.

God, Open Door, it's so circular. I trip

over this. Open AAI gets the investment.

AMD, which is worth more as the stock

price of AMD goes up,

which lets OpenAI have a greater

valuation, which boosts Nvidia's

valuation, which lets Nvidia go do more.

I mean, you get it. It's a giant circle.

So, what's what's the stage of the

cycle? Well, here's usually how cycles

work. When people are really fearful,

the only people who buy when there's

fear are people with cash. A lot of

cash. A lot. Everybody buys with cash.

And then after people do a lot of buying

with cash, you get FOMO buying. And then

after you get a lot of FOMO buying, you

get FOMO meets debt.

I kid you not. Those are the words that

are being circulated right now like on

Doomberg or otherwise is that you know

what's keeping this going is debt. You

know here you've got Meta for example

turn to lenders to secure 26 billion in

financing. If you want to see debt just

go look at Oracle. Oracle is like chalk

full of debt. Uh, I actually give credit

to a company like Amazon for using less

debt than some of these other companies

because some of the things are kind of

starting to get scary with just the

amount of FOMO meets debt. And

that's the way it works. That's how you

kind of keep fueling the cycle. Does

that mean we're at the end of the cycle?

Not necessarily. Because if we go back

over here, we can see that after debt,

we get euphoria. But then we get to a

new special phase of the cycle. The

special phase of the cycle is this.

Stock prices start getting pegged to

more euphoria.

Huh. Okay. Well, good thing that's not

happening yet, is it? Oh, wait.

Vesting of AMD ownership is tied to AMD

achieving certain share price targets

and to open AI achieving the technical

and commercial milestones required to

enable AMD deployments at scale. Ah

interesting. So, this deal is contingent

upon AMD going to the moon tripling up

to $600 at the highest trunch, which is

really similar to what you've seen with

Elon's stockbased compensation or the

Open Door plan that oh, Open Door is

going to go to $30 and then we'll get

all this money in stock.

That's a phase of the cycle where you

start tying money being made or deals

being contingent upon the stock price

moving to certain levels. And then of

course you get the mania and the bubble.

What happens after that?

Well, that's for a different video. We

don't want to talk about that. That's

that'd be crazy. Nobody wants to talk

about bubble. Nobody wants to talk about

1929. Although apparently there's like a

new book out now on the 1929 Andrew Ross

Sorcin slapped together. I wonder how

much GPT he used on it. But uh I thought

the article was fascinating. Bloomberg

did a whole write up on it. And it is

interesting because valuations today,

they're not technically as high as what

we saw in the dot bubble, which means

there's still room to go. Here's the

screeny of it right here. S&P valuation

still below.com highs. This is crazy

because I kind I hate comparing anything

to the com era, but if you look at the

Warren Buffett indicator, we are at the

highest level we have ever been

in valuations

uh for the Warren Buffett indicator.

We're like 213%

or whatever as a percentage of GDP. It

was very interesting if I Warren Buffett

indicator

current valuation current market

valuation.com strongly overvalued

Buffett indicator US stock market

divided by annualized GDP 217%. The

highest we have ever seen in history

possibly driven by some of the madness

of these circular deals but whatever. I

do wonder what kind of escape hatches

companies like Microsoft will end up

having. You know, Microsoft has like a

$19 billion deal with Nebas. And I

wonder like what escape hatches the big

companies have because usually they they

have some. The big companies are usually

able to negotiate escape hatches because

they're big. And the small companies

want to work with the big companies, so

they're able to get and negotiate exit

clauses where the small companies are

like, "Well, we'd be dead anyway if the

bubble pops, and so we may as well take

the upside now and then cash out while

you can." That's typically what happens

in a bubble. But anyway, it's worth

noting that right now there are

estimates that we will need $2 trillion

of artificial intelligence revenue to

fully fund the buildout by 2030 of

artificial intelligence that markets are

expecting. The problem is revenues are

only expected to be $1.2 trillion, which

is a 40% miss. And of course, my big

fear is that much like in 1929 where we

started, you know, bailing out

companies, it won't be enough.

We'll cut rates to zero. We'll start

printing money. And it won't be enough

to get people back to work because we

won't have created AI jobs yet. We'll

still be in an environment of not hiring

people because of artificial

intelligence. It's kind of scary, but it

is what it is. Now, you know, in the

short term, I mean, prices will move all

over the place. I mean, this morning in

the uh course member live stream, I

argued that we're probably close to a

top and the highest we would go is what

I said would be 232 on AMD. We stopped

out at about what 228 over here and

we're talking the course member live

like it's the the highest pricing is

probably going to be in the pre-market.

It almost always is. So, but that's in

our course member live stream. So,

anyway,

welcome to the AI bubble.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Pra there, financial analyst. and

YouTuber Meet Kevin. Always great to get

your take.