one week later Meta Promise millions of uses Nvidia’s The social media company, which is packing processors to power its AI expansion, also signed a huge chip deal. This time advanced micro device.
Meta said Tuesday that the multi-year agreement with AMD includes deploying up to 6 gigawatts of the company’s graphics processing units for artificial intelligence data centers, and also includes the use of AI-optimized central processing units (CPUs).
Initial shipments of MI450 GPUs in AMD’s Helios rackscale servers are expected to begin later this year.
“This is about making the right bet at the right time,” AMD CEO Lisa Su said Tuesday on CNBC’s “Squawk on the Street.”
AMD stock rose 7% on the news. Meta stock fell slightly. NVIDIA stock was almost flat.
The deal also includes performance-based warrants for Meta to acquire 160 million AMD shares, representing about 10% of the company. The first tranche vests when the first 1GW of Instinct GPUs are shipped. Once Meta buys up to 6GW, other tranches will vest.
Vesting is also tied to AMD’s stock price benchmark and Meta’s technical and commercial milestones.
Hsu told CNBC that the rights structure is a “win-win” for shareholders and supports a “very ambitious” plan and financial model. She considers the agreement one of the “most transformative deals” for chipmakers expanding their AI capabilities.
“We are in the early stages of the cycle to see what the ultimate payoff will be,” she said. “And that’s where…we need to invest ahead of the curve and really point in the direction of the greatest return.”
AMD and Meta 1-day stock price chart.
AMD signed a similar deal with OpenAI in October, positioning it as a viable second choice for AI giants and hyperscalers.
The deal also gave OpenAI warrants to acquire 160 million shares of AMD, which were tied to deployment and stock price benchmarks.
In its earnings call last month, Meta pledged to spend up to $135 billion in capital spending this year as it seeks to keep pace with mega-cap peers, OpenAI and Anthropic in the global AI race. Overall, Meta plans 30 data centers, including 26 in the United States.
Tuesday’s announcement is a significant development for AMD, which lags far behind Nvidia in the AI chip market. Nvidia is currently the world’s largest publicly traded company with a valuation of $4.66 trillion, controlling about 90% of the market, while AMD is valued at $320 billion.
“Meta is in a unique position to control the full stack and use as much of anyone’s computing as they want,” said Ben Bajarin, a chip analyst at Creative Strategies. “This is just a break in the fact that there are computational constraints, and the trade will go through in its entirety.”
Terms of the deal were not disclosed, but Bajarin, briefed on the deal, estimated it would be worth tens of billions of dollars over at least four years because “it takes a significant amount of time to deploy 6 gigawatts of power.”
Bajarin said a key part of the deal, and how it differs from Meta’s deal with Nvidia, is that the initial deployment will include customized GPUs.
“There is no indication that NVIDIA is doing anything like that,” Bajarin said. “This is a good way for them to win these deals.”
AMD’s Helios will be the first major competitor to Nvidia’s Grace Blackwell systems, which have seen a surge in demand since their launch in 2024.
NVIDIA is scheduled to report quarterly results on Wednesday, with analysts expecting revenue to rise 68% from a year ago to $66 billion, according to LSEG. Earlier this month, AMD reported a 34% increase in fourth-quarter revenue to $10.27 billion.
Meta has been a customer of AMD and Nvidia for many years. Meta also develops in-house processors, and The Information reported late last year that Meta was in talks with the following companies: google About the introduction of search companies’ tensor processing units into meta data centers in 2027.
WATCH: Watch AMD CEO Lisa Su’s full CNBC interview
