Meta Just Made a Massive AI Chip Bet—And It’s Not on Nvidia |
Meta Just Made a Massive AI Chip Bet—And It’s Not on Nvidia
Meta’s multibillion-dollar chip deal could hand the social media giant a sizable stake in one of Nvidia’s fastest-rising competitors.
BY LEILA SHERIDAN, NEWS WRITER
Illustration: Inc: Photo: Getty Images
Last week, Meta committed to buying millions of Nvidia processors to fuel its artificial intelligence expansion.
This week, it made another massive move in the AI space, the company shared in a statement.
Instead of doubling down on Nvidia, the social media giant signed a multiyear agreement with Advanced Micro Devices (AMD), deploying up to six gigawatts of AI computing capacity in its data centers and securing a potential 10 percent ownership stake in the chipmaker, CNBC reported.
The structure of the deal reveals something critical about the next phase of the AI boom: chip companies are no longer just selling hardware. They’re securing financial alliances to support future endeavors.
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The structure of the AMD deal
Under the agreement, Meta will deploy AMD’s MI450 GPUs inside its Helios rack-scale servers, with shipments beginning later this year, according to CNBC.
Notably, the deal includes a performance-based warrant allowing Meta to acquire up to 160 million AMD shares, roughly 10 percent of the company, if it hits major purchasing milestones.
The first tranche vests once AMD ships one gigawatt of Instinct GPUs. Additional tranches unlock as Meta scales purchases toward six gigawatts. Vesting is also tied to stock price threshold and technical and commercial benchmarks, CNBC reported.