AMD Stock: Meta Platforms Signs $100 Billion AI Chip Deal – Here’s What Investors Need to Know

TLDR

• Meta and AMD have agreed to a deal worth over $100 billion for 6 gigawatts of AI computing power over five years.
• AMD will supply its MI450 GPU chips plus custom CPUs designed specifically for Meta’s needs.
• Meta could acquire up to 10% of AMD’s stock through warrants priced at $0.01 per share, vesting as AMD’s stock hits targets up to $600.
• The first gigawatt of MI450 chips is set to deploy in the second half of 2026.
• The deal mirrors a similar agreement AMD struck with OpenAI last year and puts AMD in more direct competition with Nvidia and Broadcom.

AMD has landed its biggest chip deal yet, agreeing to supply Meta Platforms with 6 gigawatts of AI computing power in a partnership valued at over $100 billion.

The agreement was announced Tuesday and covers a five-year period. It centers on AMD’s upcoming MI450 GPU, with the first gigawatt of chips expected to be deployed in the second half of 2026.

Meta helped shape the MI450’s design. The chip is optimized for inference — the process that runs when an AI model responds to a user’s query — rather than the training of AI models from scratch.

Advanced Micro Devices, Inc., AMD

Each gigawatt of computing power translates to several tens of billions of dollars in chip revenue for AMD, according to the company.

Beyond GPUs, Meta will also buy CPUs from AMD. One of those CPU variants will be customized specifically for Meta, tuned to deliver strong performance while keeping energy consumption low. The deal covers two generations of AMD CPUs.

The Warrant Structure

As part of the arrangement, AMD is issuing Meta warrants to purchase up to 160 million AMD shares at just $0.01 each. That would give Meta ownership of roughly 10% of the company.

The warrants won’t all vest automatically. They are tied to AMD’s stock price hitting rising performance targets, with the final tranche only unlocking if AMD’s stock reaches $600. AMD closed at $196.60 on Monday.

There are also “technical and commercial considerations” Meta must meet for each tranche of the warrant to unlock.

This structure is nearly identical to the deal AMD struck with OpenAI in late 2025. Critics have labeled these arrangements “circular financing” — where one company pays another, which then buys back products or services from the first.

Meta’s Multi-Vendor Approach

Meta is not going all-in on AMD. The company confirmed it will continue buying chips from other vendors and developing its own in-house processors.

Last week, Meta announced it would also purchase several million Nvidia GPUs, a deal expected to cost tens of billions of dollars.

Meta’s infrastructure head Santosh Janardhan said the scale of the company’s data center buildout simply requires multiple chip suppliers.

Meta plans to deploy “tens of gigawatts” of data center computing power this decade, with CEO Mark Zuckerberg targeting “hundreds of gigawatts or more over time.” The company spent $72 billion on AI infrastructure last year and plans to spend up to $135 billion in 2026.

AMD CEO Lisa Su said the deal is a direct move to compete with Nvidia for large, long-term customers.

The deal also puts AMD in more direct competition with Broadcom, currently the leading designer of custom AI chips. AMD’s MI450 uses a chiplet-based architecture that makes customization easier than its previous single-die chip designs.

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