AMD has reached a multibillion-dollar deal with Meta to sell the Facebook parent AI chips over several years, as tech companies work with multiple players to acquire the scarce semiconductors and cloud capacity needed to drive their AI tools.
The deal also gives Meta the ability to purchase up to 10 percent of AMD, depending on stock performance targets being met.
Under the deal, Meta is to acquire AMD’s GPU accelerator chips in addition to server CPUs, including a variant that has been customised for Meta’s needs, the companies said.
Computing chips
The deal covers six gigawatts’ worth of compute capacity in total, beginning with one gigawatt of AMD’s upcoming flagship MI450 GPU in the second half of 2026, AMD chief executive Lisa Su told a news briefing.
AMD issued Meta with a performance-based warrant giving it the option to acquire up to 160 million AMD shares with an exercise price of 1 cent, as Meta buys successive orders of processors.
The warrant’s terms are also tied to share price thresholds, escalating to $600 (£444) for the final tranche. The warrant expires in February 2031.
“Meta is taking a big bet on AMD, and we are also giving Meta a chance to participate if AMD shareholders do well,” Su said.
She said each gigawatt of compute was worth “double-digit billions” under the deal.
Circular deals
Meta has separately struck a deal with Nvidia to buy millions of AI chips, and said it would continue with the GPU market leader as well as using its own custom AI chips produced by Broadcom, in an indication of how it, like other tech firms, is working to lock in supplies of specialised computing resources.
The deal represents the latest circular arrangement involving companies in the superheated AI market, and means both OpenAI and Meta will have significant stakes in one of their main chip suppliers.
OpenAI reached a similar deal with AMD last year to buy data centre chips, also with an option to buy up to 10 percent of the chip firm.
Nvidia is also reportedly negotiating a $30bn stake in OpenAI, much of which is expected to be used to buy Nvidia chips.
That deal is expected to replace a $100bn multi-year deal that was announced with great fanfare last September, but was never finalised.
Meta and other large tech companies are planning to spend hundreds of billions of dollars this year alone on AI infrastructure, with Meta saying this year’s capital expenditures would almost double over 2025 to as much as $135bn.
