WSJ What’s News - How the Massive OpenAI and AMD Deal Challenges Nvidia’s Dominance

Episode Date: October 6, 2025

P.M. Edition for Oct. 6. OpenAI and Advanced Micro Devices announced a multibillion-dollar partnership to collaborate on AI data centers, sending AMD’s stock soaring. WSJ Heard on the Street columnist Dan Gallagher joins to discuss what the deal means for AMD, and how it will challenge market leader Nvidia. Plus, Paramount has acquired popular news and opinion site the Free Press, and is installing its founder Bari Weiss as the editor in chief of CBS News. We hear from Joe Flint, who covers media and entertainment for the Journal, about what Weiss is expected to bring to the role, and why the move is a strategic one for Paramount CEO David Ellison. And Fifth Third bank is acquiring Comerica for $10.9 billion, a move that would create one of the top 20 largest banks in the U.S. WSJ reporter Gina Heeb talks about whether this is the start of a wave of consolidation in the industry. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're with Amex Platinum, you get access to exclusive dining experiences and an annual travel credit. So the best tapas in town might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at Amex.ca. www.ca slash yamex. OpenAI and AMD

announce a partnership that could challenge NVIDIA's dominance. Plus, Paramount CEO David Ellison installs the free press as editor-in-chief of CBS News. There are certainly plenty of folks who think a lot of the moves Ellison has been making

since he took over Paramount, the parent of CBS, only two months ago, by the way. are aimed at appeasing or keeping the White House off his back. And the Trump administration's confrontation with Democratic-led states over the deployment of the National Guard escalates nationwide. It's Monday, October 6th. I'm Alex O'Sulloch for the Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. OpenAI and chip designer advanced microdevices have announced a multi-billion dollar partnership to collaborate on AI data centers that will run on AMD processors. It's one of the most direct challenges yet to industry leader, Nvidia. Joining me now is WSJ Hurd on the street columnist Dan Gallagher. Dan, what does this deal entail? Essentially, OpenAI is promised to buy a lot of AMD's artificial intelligence chips in order to staff up about six gigawatts worth of computing capacity over the next several years.

That's a lot of computing. I saw somebody refer to this. You think of a gigawatt as essentially the output of an entire nuclear power plant. So you're talking lots and lots of chips. And, of course, this is all depending on certain milestones, can open AI get the money to do this, deploy this. So, you know, it's never like a sure thing. But it's a major vote of confidence for AMD. Why is this deal so important for AMD?

Well, AMD has been competing against NVIDIA in right in the sweet spot, which is called GPUs. These are the specialized chips that are super key to artificial intelligence computing. Nvidia has pretty much had the majority of that market because they had such an early lead in that technology. So far, AMD's only been able to get a very small slice of it. This deal includes a portion that Open AI will actually buy a lot of stock in AMD. if it had certain milestones. And if you're open AI, you don't want to depend on a single supplier for a key component. So it's very much in their interest to have a pretty much a competitive market for GPUs.

And what this does for AMD is all these deals that Invidio was striking last month. With OpenAI, there was a deal with Intel, was creating the impression that AMD was getting shut out of these future data center opportunities. So today's news shows that they're still a player. Of course, they have a lot of ground to cover to even come. I'm close to what Nvidia is selling. Yeah, I was wondering. Obviously, investors think this is good news for AMD.

But does this also kind of put pressure on the company to compete with the industry leader? Well, it puts a ton of pressure, especially now with today's stock movement, you know, AMD is actually, its stock has a higher valuation multiple relative to forward earnings than Nvidia. There's essentially a lot of betting that they'll be very successful with this. AMD has developed a very strong track record over the last decade under Lisa Sue's direction. So there's reason for confidence that they can do this, but it's not a sure thing because they're trying to essentially hit a moving target. They need to bring their chips fully competitive with Nvidia, and Nvidia is not sitting still.

As an example, the chips that Nvidia plans to start shipping next year will be more than three times as powerful as the most top-of-the-line ones they do now, and that's the ones AMD says they can match. And so it's a race. That was WSJ Hurd on the street columnist, Dan Gallagher. Thanks, Dan. Thanks for having me. U.S. stocks ended the day mixed today. Gains were fueled by the giant OpenAI patch that sent AMD stock price soaring more than 23% today and by a big bank deal between 5th 3rd and Comerica.

The NASDAQ closed 0.7% higher and the S&P 500 gained 0.4%. while the Dow fell 0.1%. Today, Illinois officials sued to stop President Trump from deploying National Guard forces to Chicago. On Saturday, Trump ordered the federalization of 300 Illinois National Guardsmen over the objection of Governor J.B. Pritzker, contending that emergency conditions beyond the control of civilian authorities are impeding the enforcement of federal immigration law.

The lawsuit filed by the state of Illinois, and the city of Chicago, argues that Trump's Chicago order reflects a longstanding hostility to the city and its leaders, rather than a true emergency requiring a military response. The move marks an escalation in the administration's confrontation with Democratic-led states nationwide. An extraordinary weekend of legal maneuvering culminated in an emergency hearing last night, during which a federal judge in Oregon temporarily blocked the deployment of any National Guard forces under the Trump administration's control inside the state. The White House is already appealing the ruling.

And the U.S. Supreme Court has declined to hear an appeal from Galane Maxwell, the Jeffrey Epstein confidant who is currently serving a 20-year sentence for sex trafficking. The court didn't give a reason for the denial, which leaves intact a federal appeals court ruling that upheld Maxwell's conviction. Coming up, what Paramount hopes to gain by installing Barry Weiss as the editor-in-chief of CBS News. That's after the break. This episode is brought to you by Peloton. A new era of fitness is here.

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Paramount CEO David Ellison is also installing Weiss as the editor-in-chief of CBS News, empowering her to set the storied news organization's editorial vision. For more, I'm joined by WSJ Media and Entertainment reporter Joe Flint. Joe, what do we know about the details of this deal? Paramount is paying $150 million in cash and stock for the free press. That could go up depending upon the performance of Paramount stock for a website, which is only a few years old. The free press started after Barry Weiss, spectacularly kissed off. the New York Times, and her role there is an opinion columnist. And Ellison feels that by bringing

Barry Weiss in there and the mindset that she has, CBS can perhaps do a better job of appealing to the center of America, the center right and the center left, and not the extremes, which is where so much of news is at these days. What is she expected to bring to CBS, and how might it change under her leadership? There'll be a lot of eyes on what Weiss does in her role as editor-in-chief. She is not there to run the business of CBS News. Barry Weiss is there to be the editor, if you will, and set the tone of the network coverage,

help decide what stories are important, what's the best way to tell them to the viewer, how to reach the broadest audience, how to make sure your stories aren't slanted one way or another. I'm curious whether there is a political element here for Ellison. There are certainly plenty of folks who think a lot of the moves Allison has been making since he took over Paramount, the parent of CBS, only two months ago, by the way, are aimed at appeasing or keeping the White House off his back. He agreed as part of the deal to bring an ombudsman into CBS News and the person they've chose. and has more of a conservative background.

Face the Nation agreed to change the way they air interviews and edit them in part in response to criticism from the White House and the administration. So some of these are viewed as reactions either to help his business run smoother or to appease the current president who has shown he has no problem taking on media and questioning them and threatening them. That was WSJ reporter, Joe Flint. Thanks, Joe. Thanks for having me.

That deal we mentioned that fueled gains in U.S. stock markets? Fifth Third Bank said today that it will acquire Comerica for $10.9 billion. The All-Sock Deal would create one of the top 20 largest banks in the U.S. and allow Fifth Third to build on Comerica's commercial presence and expand deeper into retail. It marks the latest effort by regional lenders to compete with banking behemoths, such as J.P. Morgan Chase and Bank of America. Gina, he covers regional banks for the journal and is here now with more.

Gina, why did this deal happen? So all of the banks, aside from the largest ones, are under a lot of pressure right now and have been under pressure to grow bigger as banks like J.P. Morgan, Bank of America, Wells Fargo City Group become more dominant in the market, and it becomes harder for the smaller guys to compete. So the super-regionals, as we call them, these are banks around the size of fifth-third. Even they are at a point where they're looking to scale up, and on Comerica's side, they have been under pressure to sell for a very long time. They are more of a mid-sized bank a lot smaller than fifth-third, and they're also near this regulatory. threshold of $100 billion in assets, where it becomes a lot more costly for them to complete

the compliance work they need to for regulators. So as more of these regional banks look to compete with the big ones, could we expect this to be the kind of first domino in a series of consolidations or remains to be seen? We have heard about an expected wave of consolidation for a while now. And some things are still creating challenges. Interest rates are still high. There aren't as many big banks willing to sell right now. But there is one really positive sign for banks looking to do deals, and that is the regulatory environment. So if you get banks actually willing to sell, you get the pricing right and interest rates continue to go down a bit, we could very well see more deals like this. That was WSJ reporter.

Gina Hebe. Thanks, Gina. Thanks for having me. And finally, the Nobel Committee has kicked off announcing this year's prizes. First up today was the prize for physiology or medicine, and it went to immunologist Mary Brunco, Fred Ramsdale, and Shimon Sakaguchi. But Ramsdale, as far as anyone is aware, doesn't know he's won the prize yet. The CEO of the company where he works says that Ramsdale is backpacking somewhere in Idaho and is off the grid. The trio uncovered a process that prevents the immune system from attacking our own tissues, called peripheral immune tolerance. The work unlocked a new field of research and potential therapies.

And that's what's news for this Monday afternoon. Today's show is produced by Pierre Bienname and Rodney Davis with supervising producer Michael Cosmedes. I'm Alex Oslo for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Thank you.