Meta agreed to purchase artificial intelligence chips from Advanced Micro Devices in a deal potentially worth more than $100 billion, also securing the opportunity to buy up to 10% of AMD’s stock. The 6-gigawatt agreement will see initial shipments of the MI450 chips beginning in the second half of 2026.
The deal reflects Meta’s urgent push to build artificial intelligence infrastructure, announced days after the company committed to a long-term Nvidia partnership for millions of chips. As demand for AI systems surges, tech companies are competing aggressively to secure semiconductor supply.
Meta will buy AMD’s latest MI450 chips to power its data centers. AMD issued Meta a performance-based warrant for up to 160 million shares at $0.01 each, with tranches vesting progressively as Meta’s purchases scale from the initial 1-gigawatt shipment to the full 6-gigawatt commitment.
AMD’s Race Against Nvidia
Advanced Micro Devices is working to keep pace with Nvidia, which has established an early lead in tailoring graphics processing units (GPUs) for AI applications. Nvidia’s chips power systems like ChatGPT and image generators. Demand for AI chips has skyrocketed as more people began using AI chatbots, leading tech companies to compete for the supply needed to build and run these systems.
Meta’s Expanded AI Footprint
Meta has expanded its efforts to build AI capabilities while competing with Google and OpenAI. In June, the company invested $14.3 billion in AI data company Scale and recruited its CEO, Alexandr Wang, to help lead a team developing “superintelligence.” In December, Meta acquired artificial intelligence startup Manus as it continues pushing to expand AI offerings across its platforms.
Market Reaction and Return Concerns
AMD shares jumped more than 9% before the market opened on Tuesday. While appetite for AI chips remains large, some industry observers express concern about whether companies like Meta can generate sufficient returns on their massive infrastructure investments to justify the spending.