Meta Unveils Ambitious $100 Billion Deal with AMD to Enhance AI Capabilities
Meta has announced a landmark deal potentially worth up to $100 billion with AMD, aimed at bolstering its AI infrastructure and data center capabilities. This multiyear agreement, revealed on Tuesday, is projected to drive an additional six gigawatts of data center power demand.
As a part of the arrangement, AMD has granted Meta a performance-based warrant for up to 160 million shares of AMD common stock—approximately 10% of the company—valued at just $0.01 each. This stock option is contingent upon specific milestones related to AMD’s stock performance, requiring the share price to reach $600 for Meta to fully realize its stock allocation, a target far from its recent closing price of $196.60.
Key Highlights of the Agreement:
– Meta will acquire AMD’s MI540 series GPUs and cutting-edge CPUs.
– CPUs are gaining importance in the AI landscape for their efficiency and scalability, minimizing reliance on Nvidia.
– AMD’s CEO, Lisa Su, noted a robust demand for CPUs driven by AI infrastructure expansion.
Su commented, “The CPU market is absolutely on fire,” recognizing the significant growth stemming from the scaling of AI applications and infrastructure. The partnership with Meta positions AMD favorably as AI firms seek alternatives to Nvidia, which has historically dominated the AI chip market.
Meta’s CEO, Mark Zuckerberg, emphasized that collaborations like this with AMD are crucial for diversifying computing resources, aligning with the company’s goal of developing “personal superintelligence.” This vision encompasses AI systems that are designed to enhance individual experiences in daily life.
Looking ahead, Meta is committing to an impressive investment of at least $600 billion in U.S. data centers and AI initiatives over the coming years, which includes a planned capital expenditure of $135 billion in 2026. Their recent focus includes a $10 billion gas-powered data center campus in Indiana, targeting 1 gigawatt of compute capacity.
This announcement follows a recent multiyear agreement between Meta and Nvidia to enhance their data centers with advanced CPUs and GPUs. Additionally, Meta is in the process of developing its own in-house chips, despite some delays in that initiative.
This article has been updated to include insights from AMD’s CEO Lisa Su.
