Advanced Micro Devices (AMD) Stock: Meta Signs $100 Billion AI Chip Deal

TLDR

• Meta and AMD agreed to a deal worth over $100 billion for 6 gigawatts of AI computing power over five years.
• AMD will supply MI450 GPUs plus custom CPUs built specifically for Meta’s workloads.
• Meta could acquire up to 10% of AMD stock through warrants priced at $0.01 per share.
• The first gigawatt of chips is set to deploy in the second half of 2026.
• The deal closely mirrors AMD’s earlier agreement with OpenAI.

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Meta Platforms and AMD have agreed to a chip supply deal valued at over $100 billion, covering 6 gigawatts of AI computing power over the next five years.

The deal was announced Tuesday and puts AMD in direct competition with Nvidia and Broadcom for Meta’s AI infrastructure spend.

Advanced Micro Devices, Inc., AMD

AMD’s MI450 GPU sits at the center of the agreement. Meta helped shape the chip’s design, optimizing it for inference — the process an AI model runs when responding to a user query. The first gigawatt of MI450 chips is expected to deploy in the second half of 2026.

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

Custom CPUs Also Part of the Deal

Beyond GPUs, Meta will buy AMD CPUs, including a custom variant tuned specifically for Meta’s needs. The goal is strong performance at low energy consumption. The agreement covers two generations of AMD CPUs.

AMD CEO Lisa Su described the arrangement as a direct effort to stay competitive with Nvidia for large, long-term customers.

“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 Warrant Structure

AMD is issuing Meta warrants to buy up to 160 million AMD shares at $0.01 each — roughly 10% of the company. The warrants vest in stages, tied to AMD’s stock hitting rising price targets. The final tranche only unlocks if AMD reaches $600 per share. AMD closed at $196.60 on Monday.

Each tranche also carries “technical and commercial considerations” Meta must satisfy.

The structure mirrors AMD’s deal with OpenAI announced in late 2025. Critics have called these arrangements “circular financing,” where payment flows between two companies that also buy from each other.

Meta Is Not Going AMD-Only

Meta confirmed it will keep buying chips from multiple vendors. Last week, the company announced a separate multi-billion dollar deal to purchase Nvidia GPUs.

Meta’s infrastructure head Santosh Janardhan said the scale of the company’s data center buildout requires more than one supplier.

Meta plans to deploy tens of gigawatts of computing power this decade. The company spent $72 billion on AI infrastructure in 2025 and plans to spend up to $135 billion in 2026.

AMD stock closed down 1.77% on Tuesday. Meta was down 2.81%.

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