Meta Platforms has struck a deal with Advanced Micro Devices (AMD) to purchase up to six gigawatts of AI computing power, a move that could see the social media giant acquire a stake of up to 10% in the chipmaker. The multiyear agreement, announced Tuesday, will see Meta purchase AMD’s latest GPUs and CPUs to power its expanding data center infrastructure, with initial shipments expected in the second half of 2026, according to a CNBC report.
The deal is valued at potentially over $100 billion, reflecting the immense scale of Meta’s investment in artificial intelligence. As part of the agreement, AMD has issued Meta a performance-based warrant to purchase up to 160 million shares of AMD common stock, currently representing roughly 10% of the company, at a price of $0.01 per share. However, the full stock award is contingent on AMD’s share price reaching $600, as reported by TechCrunch. AMD’s stock closed at $196.60 on Monday.
The agreement underscores Meta’s strategy to diversify its AI compute infrastructure and reduce reliance on Nvidia, which currently dominates the market for AI chips. Last week, Meta announced a separate “multigenerational” agreement with Nvidia to build data centers powered by Nvidia’s chips, demonstrating a parallel pursuit of multiple AI hardware suppliers. Meta CEO Mark Zuckerberg has stated the company plans to invest at least $600 billion in U.S. Data centers and AI infrastructure over the next several years, with a projected capital expenditure of $135 billion in 2026 alone.
AMD will supply Meta with its MI540 series of GPUs and its latest generation of CPUs. AMD CEO Lisa Su highlighted the growing importance of CPUs in the AI infrastructure stack, noting their efficiency and scalability, particularly for AI inference. “The CPU market is absolutely on fire,” Su said during an investor briefing, adding that AMD’s portfolio is “in an extremely good position” to capitalize on the increasing demand. This shift towards CPUs for inference reflects a broader industry trend to optimize AI workloads beyond the traditionally GPU-centric approach.
The structure of the deal, including the performance-based warrant, mirrors a similar agreement AMD struck with OpenAI in October, suggesting a growing trend of equity-linked supply agreements in the AI chip market. Some observers have characterized these arrangements as a form of “circular financing,” where equity incentives are tied to large-scale chip purchases. An 8-K filing with the Securities and Exchange Commission details the terms of the warrant issued to Meta.
The Meta-AMD partnership is also notable for AMD’s development of custom AI chips tailored to Meta’s specific workloads, utilizing a modular ‘chiplet’ architecture. This co-engineering approach signals a move towards more specialized AI hardware designed to optimize performance for individual customer needs. The deal represents a significant win for AMD as it seeks to gain ground on Nvidia, which currently controls an estimated 90% of the AI GPU market and reached a market capitalization exceeding $4.6 trillion late last year.
While Meta’s AI spending is under increasing investor scrutiny, the company recently attributed record quarterly revenue to improvements driven by artificial intelligence. AMD reported fourth-quarter sales growth of 34% to $10.27 billion, while Nvidia is expected to report revenue growth of around 68% year-on-year when it publishes its results this week. The long-term implications of the Meta-AMD deal, and whether it will fundamentally alter the competitive landscape of the AI chip market, remain to be seen.