Meta Platforms, the parent company of Facebook, will purchase advanced artificial intelligence chips from Advanced Micro Devices under a major supply agreement that could also allow Meta to acquire up to a 10% stake in the chipmaker.
Under the deal, Meta will buy AMD’s latest MI450 AI chips to power its data centres. The agreement covers up to 6 gigawatts of computing capacity, with shipments for the first 1 gigawatt expected to begin in the second half of this year.
The deal could be worth more than $100 billion over time, depending on the scale of purchases.
Following the announcement, AMD shares rose more than 9% in pre-market trading on Tuesday.
The companies said AMD has issued Meta a performance-based warrant allowing it to buy up to 160 million AMD shares at $0.01 per share. The warrant will vest in stages if Meta meets agreed purchase targets.
The first portion of the warrant will vest after delivery of the initial 1 gigawatt of chips. Additional portions will vest as Meta increases its purchases up to the full 6-gigawatt level.
The agreement highlights Meta’s growing investment in artificial intelligence infrastructure and AMD’s expanding role as a major supplier of AI hardware.
Comment
