AMD Takes $1.1 Billion Warrant Charge for 320 Million Shares as OpenAI, Meta Chip Deals Advance
Updated
Updated · Yahoo Finance · Nov 4
AMD Takes $1.1 Billion Warrant Charge for 320 Million Shares as OpenAI, Meta Chip Deals Advance
3 articles · Updated · Yahoo Finance · Nov 4
Summary
$1.1 billion of AMD's latest quarterly costs came from warrants letting OpenAI and Meta buy up to 320 million shares for a penny each, equal to $0.66 a share after being zero last quarter.
MI450 chip shipments triggered the accounting, and CFO Jean Hu said the charge rose with AMD's stock price and the higher odds of meeting vesting conditions; the stock ended Sept. 25 at $630, above the $600 final hurdle.
OpenAI and Meta each agreed to buy AMD data-center chips for projects drawing up to 6 gigawatts, and if fully unlocked the warrants would give them about 16% of the enlarged company.
AMD said the charge is non-cash and will not hit non-GAAP results or free cash flow, even as it builds for a record fourth quarter with about $17 billion in expected revenue.
That expansion is straining the balance sheet: inventory jumped $3 billion to $11.5 billion, free cash flow fell to about $550 million from nearly $2 billion expected, and debt more than doubled to roughly $7 billion.