Key Highlights
- A groundbreaking partnership between Meta and Advanced Micro Devices spans five years and exceeds $100 billion in value for 6 gigawatts of AI processing capability.
- The semiconductor giant will deliver MI450 GPU processors alongside specially engineered CPUs tailored to Meta’s specifications.
- Through warrant agreements priced at $0.01 per share, Meta has the potential to own as much as 10% of AMD, with vesting triggered when stock prices reach thresholds up to $600.
- Initial deployment of one gigawatt worth of MI450 processors is scheduled for late 2026.
- This partnership follows AMD’s comparable arrangement with OpenAI and intensifies competition with Nvidia and Broadcom in the AI chip market.
Advanced Micro Devices has secured what may be its most significant contract to date, partnering with Meta Platforms to deliver 6 gigawatts worth of artificial intelligence processing capacity in an arrangement exceeding $100 billion.
Tuesday’s announcement detailed the five-year collaboration, which focuses primarily on AMD’s forthcoming MI450 GPU processor, with initial gigawatt-scale deployment anticipated during late 2026.
Meta played an active role in developing the MI450’s specifications. The processor prioritizes inference workloads — the computational phase when AI systems generate responses to user inputs — over model training operations.
Advanced Micro Devices, Inc., AMD
According to company estimates, each gigawatt of processing capability represents chip revenue in the tens of billions of dollars for AMD.
The partnership extends beyond graphics processors, as Meta will also procure central processing units from AMD. Among these CPU offerings, one variant will feature custom engineering exclusively for Meta, balancing high performance with energy efficiency. The contract encompasses two successive generations of AMD’s CPU technology.
Understanding the Warrant Agreement
The deal includes AMD granting Meta warrants enabling the purchase of up to 160 million AMD shares at merely $0.01 per share. Should these warrants be fully exercised, Meta would control approximately 10% of the semiconductor company.
These warrants feature conditional vesting tied to AMD’s share price performance. The agreement structures multiple tranches, with the final portion requiring AMD’s stock to hit $600 before unlocking. AMD’s shares closed Monday’s trading session at $196.60.
Additionally, Meta must satisfy certain “technical and commercial considerations” for each warrant tranche to become exercisable.
This framework closely resembles AMD’s previous agreement with OpenAI finalized in 2025. Some analysts have characterized such arrangements as “circular financing” — situations where funds flow between companies that simultaneously engage in reciprocal business transactions.
Meta’s Diversified Chip Strategy
Meta isn’t placing all its chips with AMD. The social media giant has confirmed its intention to maintain relationships with multiple semiconductor suppliers while advancing proprietary processor development.
Just last week, Meta disclosed plans to acquire millions of Nvidia GPUs through a contract valued at tens of billions of dollars.
Santosh Janardhan, Meta’s infrastructure leader, explained that the massive scale of the company’s data center expansion necessitates working with numerous chip manufacturers.
“All of the chip makers end up having sort of a seat at the table,” Janardhan said.
Meta’s roadmap calls for deploying “tens of gigawatts” of data center processing power throughout this decade, with CEO Mark Zuckerberg projecting growth to “hundreds of gigawatts or more over time.” The company allocated $72 billion toward AI infrastructure in the previous year and projects spending between $100 billion and $135 billion in 2026.
AMD’s CEO Lisa Su characterized the partnership as a strategic offensive against Nvidia in securing major, extended-term customer relationships.
“Meta has a lot of choices,” Su said. “I want to make sure that we are always a clear seat at the table when they think about what they need next.”
The agreement also positions AMD as a more formidable challenger to Broadcom, presently the dominant force in custom AI chip design. AMD’s MI450 leverages chiplet-based architecture, enabling greater customization flexibility compared to previous monolithic chip designs.
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