Meta to Buy $100 Billion of AMD AI Computing Power in Landmark Deal

Meta Commits to 6 GW of AI Computing Capacity

Under the agreement, Meta will acquire sufficient quantities of AMD’s latest MI450 series chips to power data centers using up to 6 gigawatts of computing power over the next five years. Each gigawatt of computing power translates into several tens of billions of dollars in revenue for AMD, according to the company.

Meta is expected to deploy the first gigawatt of this computing capacity starting later this year. The deal is valued at more than $100 billion in total, reflecting the scale of Meta’s planned investment in AI infrastructure.

The announcement had an immediate market impact, with AMD shares rising 14% in premarket trading on Tuesday.

Warrant Structure Could Give Meta Up to 10% of AMD

As part of the arrangement, AMD has agreed to grant Meta warrants to purchase up to 160 million AMD shares, representing roughly 10% of the company. The exercise price for these warrants is $0.01 per share, contingent on the achievement of specified milestones.

The full stock award is conditional on AMD’s share price performance. Meta will only receive the final tranche of shares once AMD’s stock reaches $600. AMD shares had closed at $196.60 on Monday prior to the announcement.

The transaction represents a significant commercial win for AMD as it seeks to expand its role in supplying GPUs, the microchips that power artificial intelligence applications, and to compete more directly with Nvidia in this market.

FAQ

What have Meta and AMD agreed to do?
Meta has agreed to buy enough AMD MI450 series chips to provide up to 6 gigawatts of AI computing power over five years, in a deal valued at more than $100 billion.

How could this deal affect Meta’s ownership stake in AMD?
AMD will issue Meta warrants to buy up to 160 million AMD shares at $0.01 each, which could give Meta ownership of roughly 10% of AMD if all milestones and share price conditions are met.

When will Meta start using the new computing power?
Meta is expected to deploy the first gigawatt of computing power from AMD’s chips starting later this year.

What conditions are tied to the full stock award for Meta?
The complete warrant package is conditional on a rise in AMD’s share price, with the final tranche of shares only available once AMD’s stock reaches $600.