Meta Platforms, Inc. (NASDAQ:META) shares experienced a 4% decline over the past year and remain flat year-to-date, but a recently announced partnership with NVIDIA Corporation (NASDAQ:NVDA) is prompting speculation about the social media giant’s future infrastructure strategy. The deal will see Meta leverage NVIDIA’s graphics processing units (GPUs) to enhance its existing operations and accelerate advancements in artificial intelligence training and inference.
The agreement, announced earlier this week, has sparked commentary from CNBC’s Jim Cramer, who suggested Meta CEO Mark Zuckerberg may be laying the groundwork for a full-fledged web services business. “I am beginning to believe that Mark Zuckerberg is trying to develop his own web services,” Cramer stated on Tuesday. He pointed to Meta’s recent $8 billion investment in Corning fiber optic material and NVIDIA’s announcement regarding Meta’s intention to utilize “millions of AI chips in data centers” as evidence of this potential shift.
The partnership involves close collaboration between Meta and NVIDIA across chips, networking, and software, aiming to optimize AI workloads. NVIDIA founder and CEO Jensen Huang described the collaboration as a “deep co-design across CPUs, GPUs, networking and software” to provide Meta’s engineers with the full NVIDIA platform. Meta intends to construct advanced AI clusters utilizing NVIDIA’s forthcoming Rubin platform, with CEO Mark Zuckerberg stating the expanded partnership will contribute to delivering “personal superintelligence to everyone in the world.”
Beyond AI infrastructure, Meta is also integrating NVIDIA’s Confidential Computing technology to bolster privacy within its WhatsApp messaging service and employing NVIDIA’s Spectrum-X Ethernet platform to support AI-scale networking. This expansion comes as Meta reported fourth-quarter revenue of $59.9 billion and earnings per share of $8.88, exceeding analyst expectations of $58.35 billion and $8.19, respectively. The company attributed its performance to increased traffic during the holiday season and efficiency gains driven by AI.
Cramer’s comments followed a warning that companies attempting to reduce their reliance on NVIDIA could face challenges in securing adequate chip supplies. He reacted on X, calling the Meta-Nvidia deal a “surprise announcement” and a “huge commitment,” and adding that “the smugness toward NVDA by any and all is tiresome.” This sentiment reflects growing concerns about the concentration of GPU supply within NVIDIA, particularly as demand for AI processing power continues to surge.
Futurum Group CEO Daniel Newman echoed this sentiment on X, stating that “$META will buy and build compute and $NVDA is core to its mission,” characterizing the AI race as a competition for maximum compute capacity. He also noted that Meta will likely continue to diversify its supplier base, including Advanced Micro Devices (AMD), despite its deepening relationship with NVIDIA.
