October 28, 2025

finance  
AMD Partners OpenAI, Nvidia Faces New Rival

The artificial intelligence sector is experiencing rapid growth and significant investment, with AI training startup Mercor reaching a $10 billion valuation after securing $350 million in funding. Mercor connects specialized contractors globally to train AI models, including those powering chatbots like ChatGPT, addressing a critical need for human expertise in AI development. Meanwhile, the AI chip market is heating up as Advanced Micro Devices (AMD) partners with OpenAI, positioning itself as a strong competitor to Nvidia. This partnership is projected to generate tens of billions in revenue for AMD, with expectations of double-digit billions in data center AI revenue starting in 2027. Broadcom has also secured a major deal with OpenAI, and Taiwan Semiconductor continues to dominate AI processor manufacturing with approximately 90% of the market. Qualcomm is entering the AI data center chip market, challenging established players. In the financial sector, JPMorgan Chase CEO Jamie Dimon reports that the bank's $2 billion annual AI investment is already paying for itself through cost savings and efficiency gains. Investors are exploring various avenues for AI exposure, with Amazon emerging as a favored AI stock among billionaires due to its cloud services (AWS) and e-commerce operations, alongside semiconductor equipment manufacturers like Lam Research, which shows strong free cash flow. Alphabet is also advancing in quantum AI with its new Willow chip, hinting at future computing possibilities.

Key Takeaways

  • AI training startup Mercor has achieved a $10 billion valuation after raising $350 million, highlighting the demand for human expertise in AI development.
  • AMD is partnering with OpenAI to compete in the AI chip market, with projections of tens of billions in revenue.
  • Broadcom has a significant deal with OpenAI, and Taiwan Semiconductor manufactures about 90% of AI processors.
  • Qualcomm is entering the AI data center chip market, posing a challenge to Nvidia and AMD.
  • JPMorgan Chase CEO Jamie Dimon states the bank's $2 billion annual AI investment has already paid for itself through cost savings.
  • Amazon is a favored AI stock among billionaires, driven by its AWS cloud services and e-commerce growth.
  • Lam Research's AI chip equipment sales are driving strong free cash flow, suggesting its stock may be undervalued.
  • Alphabet is developing quantum AI capabilities with its new Willow chip.
  • Investors can gain AI exposure through ETFs focusing on AI platforms, semiconductors, data centers, and cybersecurity.
  • Mercor's platform uses AI to match vetted experts for specialized AI training tasks, including refining models like ChatGPT.

AI Training Startup Mercor Valued at $10 Billion

Mercor, a startup that helps AI models learn, is finalizing a new funding deal that values the company at $10 billion. This is five times its value from February. Mercor manages contractors worldwide who train chatbots to think and speak like humans. The company pivoted to hiring professionals to train AI, a lucrative area in the AI boom. Mercor's success highlights the growing need for human expertise in developing advanced AI.

Mercor Secures $350M Funding at $10B Valuation for AI Training

AI startup Mercor has finalized a $350 million funding round, valuing the company at $10 billion. Co-founders Brendan Foody, Adarsh Hiremath, and Surya Midha, who dropped out of college, lead Mercor. Initially a recruiting startup using AI, Mercor built a network of specialized workers sought by major AI companies to train chatbots. This funding will help Mercor expand its services in the growing AI training sector.

Mercor Reaches $10 Billion Valuation for AI Training Services

AI startup Mercor, which helps chatbots learn to communicate like humans, has achieved a $10 billion valuation. The company manages a global network of contractors who train AI models by providing essential human feedback. These trainers refine AI systems like ChatGPT, ensuring accuracy and relevance. Mercor's business model addresses the high demand for quality training data, crucial for advanced AI development.

AMD Surges on OpenAI Partnership, Competes with Nvidia in AI Chips

Advanced Micro Devices (AMD) stock is rising significantly due to a major AI chip partnership with OpenAI. This deal positions AMD as a strong competitor to Nvidia in the AI chip market. The partnership is expected to generate tens of billions in revenue, with AMD forecasting double-digit billions in data center AI revenue starting in 2027. Analysts have increased their revenue and earnings estimates for AMD, supporting a positive outlook for the stock.

AI Analyst Bullish on AMD Stock Amid Record Rally

Advanced Micro Devices (AMD) stock is experiencing a significant rally, earning an Outperform rating from TipRanks' AI Stock Analysis tool. While Wall Street analysts show cautious optimism, AMD's rapid revenue growth and strong demand for its products are positive factors. The company's partnership with OpenAI further boosts investor confidence in its AI chip capabilities. However, export restrictions and recent fluctuations in data center AI revenue present challenges.

Invest in Taiwan Semiconductor and Broadcom for AI Growth

Investors seeking AI opportunities may find Taiwan Semiconductor and Broadcom more promising than quantum computing company IonQ. Taiwan Semiconductor is the leading manufacturer of advanced AI processors, holding about 90% of the market. Broadcom has secured a major deal with OpenAI, and its AI revenue is projected to surge significantly. These companies are already experiencing substantial growth and have a strong foothold in the AI market.

AI Stocks Taiwan Semiconductor and Broadcom Outperform IonQ

While IonQ develops advanced quantum computing technology, its long-term benefits remain unproven, making it a riskier investment. Taiwan Semiconductor is the leading manufacturer of AI processors, supplying chips for most AI data centers. Broadcom recently signed a significant deal with OpenAI, and its AI sales are expected to grow dramatically. These two AI-focused companies offer more immediate and substantial growth potential compared to IonQ.

Alphabet Explores Quantum AI with Breakthrough Willow Chip

Alphabet is making significant advancements in quantum AI, a potentially revolutionary technology. The company has developed a chip called Willow, which has achieved a breakthrough in processing complex computations. This development could redefine modern computing and lead to new applications in fields like energy modeling and drug discovery. While quantum AI is still in its early stages, Alphabet's progress with Willow suggests it could become a major player in this future technology.

Top ETFs for AI Exposure Across the Tech Stack

Investors can gain exposure to the artificial intelligence (AI) boom through various Exchange Traded Funds (ETFs). Core AI funds focus on companies building AI platforms, while others target related sectors like semiconductors, data centers, and cybersecurity. Expense ratios for these thematic ETFs range from 0.35% to 0.75%. Popular options include the Global X Artificial Intelligence & Technology ETF, iShares Semiconductor ETF, and First Trust NASDAQ Cybersecurity ETF, offering diverse ways to invest in AI's growth.

Qualcomm Enters AI Data Center Chip Market, Challenges Nvidia

Qualcomm has announced new chips designed for AI data centers, marking its entry into a competitive market. This move positions Qualcomm as a potential challenger to established AI chip leaders like Nvidia and AMD. The company plans a regular roadmap for major releases and updates in the data center sector. Qualcomm's expansion into this high-demand area could significantly impact the AI chip landscape.

Mercor's AI Platform Connects Experts, Reaches $10B Valuation

Mercor, an AI platform connecting industry professionals for AI training, has raised $350 million, valuing the company at $10 billion. The platform uses AI to evaluate candidates and match experts with specialized AI training tasks, addressing the shortage of high-quality human expertise needed for models like ChatGPT. Mercor differentiates itself by focusing on vetted experts for high-value tasks, unlike broader data labeling services. The company plans to expand into healthcare and legal services.

JPMorgan's $2B AI Investment Pays Off, Says Jamie Dimon

JPMorgan Chase CEO Jamie Dimon stated that the bank's $2 billion annual investment in artificial intelligence has already paid for itself. AI is driving significant cost savings, estimated at $1.5 billion currently and projected to reach $2 billion next year, and is used across nearly all business lines for savings, growth, and risk management. Dimon acknowledged that AI may lead to fewer jobs in certain functions, requiring retraining, but emphasized its crucial role in the future of banking.

Lam Research Stock Undervalued Due to AI Chip Equipment Sales

Lam Research Corp. (LRCX) shows strong free cash flow (FCF) margins, driven by sales of AI-related chip equipment. The company reported a 30% FCF margin on semiconductor equipment sales, with revenue increasing due to high demand. Despite retreating from some investments in China, Lam Research maintains strong gross and operating margins. Analysts project continued revenue growth, suggesting LRCX stock is undervalued and could see significant upside.

Amazon is Billionaires' Favorite AI Stock Over Nvidia

While Nvidia is popular, Amazon is the AI stock favored by several billionaire investors, including Ken Griffin, Izzy Englander, Chase Coleman, David Tepper, Bill Ackman, and Warren Buffett. These investors see significant AI-related growth prospects in Amazon's cloud services (AWS) and e-commerce operations. Amazon's AWS is expected to benefit greatly from increased cloud adoption, spurred by AI, and its e-commerce business continues to grow, enhanced by AI for efficiency.

Sources

AI Training Mercor Startup Valuation Funding Rounds AI Models Chatbots Human Expertise in AI AI Chip Market AMD OpenAI Partnership Nvidia AI Chips Data Center AI Revenue AI Stock Analysis Taiwan Semiconductor Broadcom Quantum AI Alphabet Willow Chip AI ETFs Semiconductors Cybersecurity Qualcomm JPMorgan Chase AI Investment Cost Savings Job Displacement Lam Research Chip Equipment Sales Free Cash Flow Amazon AWS E-commerce