Meta has struck a multibillion dollar chip deal with AMD that could lead to the Facebook owner taking a 10 per cent stake in the group, sending shares in the US chipmaker surging on Tuesday.
The social media giant said it would acquire customised chips from AMD as it races to develop and deploy its AI models.
AMD also issued Meta with a performance-based warrant, giving it the option to acquire up to 160 million AMD shares in tranches at an exercise price of $0.01 (€0.009), as the Facebook owner buys successive orders of processors.
The shares-for-chips arrangement represents the latest “circular” transaction in the industry and mirrors a deal AMD struck with OpenAI in October, in which the ChatGPT maker was offered a 10 per cent stake in the chip group over time.
RM Block
Shares in AMD, which has a market capitalisation of $320 billion, surged 14 per cent in premarket trading on Tuesday.
The transaction is also the latest sign that Big Tech customers are looking to diversify supply away from market leader Nvidia, which last week announced its own multiyear deal with Meta to supply it with “millions” of its chips over the coming years.
Could Simon Harris’s savings scheme for the ‘middle classes’ prove to be a sound investment?
Meta will receive its first tranche of AMD shares in the second half of this year when the first gigawatt of chips is shipped, said AMD’s chief executive Lisa Su. The terms of the warrant are also tied to certain share price thresholds, escalating to $600 for the final tranche. The warrant expires in February 2031.
“In some sense, Meta is taking a big bet on AMD, and we are also giving Meta a chance to participate if AMD shareholders do well,” Su said. “From a financial standpoint, each gigawatt of compute is worth double-digit billions.”
Su said the warrant structure would help “make sure that we are always a clear seat at the table when [Meta] are thinking about what they need next”.
Meta’s chief executive Mark Zuckerberg said he expected AMD to be “an important partner for many years to come”.
Meta has said that it will almost double its AI infrastructure spending this year to as much as $135bn, as US tech giants rush to build the data centres to train and run AI software. It is already one of AMD’s biggest AI chip customers.
“We don’t believe that a single silicon solution will work for all of our workloads,” said Santosh Janardhan, Meta’s head of infrastructure. “There’s a place for Nvidia, there’s a place for AMD and ... there’s a place for our own custom silicon as well. We need all three.”
Under the deal, AMD will build a custom version of its MI450 AI chips for Meta. They will be used primarily for “inference” workloads, the process of running models after they have been trained.
The chips need 6 gigawatts of power – equivalent to the amount required by 5mn US households for a year.
Increasingly creative funding arrangements to support massive AI infrastructure buildouts have emerged in recent years, leading to warnings about circular financing.
AMD has, for example, helped data centre builder Crusoe secure a $300mn loan from Goldman Sachs by offering a backstop guaranteeing the use of its chips if Crusoe is unable to find customers after installing them in an Ohio facility.
Tech giants such as Meta, historically flush with cash, are meanwhile facing the prospect of tapping bond and equity markets or stemming capital returns to shareholders to help fund their unprecedented infrastructure plans. The Facebook and Instagram parent raised $30bn in October, marking its biggest bond sale to date. – Copyright The Financial Times Limited 2026
