AMD and Meta sign $100 billion AI infrastructure deal

AMD has struck a $100 billion deal with Meta to power their AI infrastructure

AMD and Meta have announced a multi-year chip deal that will see AMD deploy 6 Gigawatts of AMD Instinct AI GPUs. Shipments for Meta’s first Gigawatt installation will start in the second half of this year, with Meta using AMD’s Helios rack-scale architecture.

This deal will see Meta purchase a huge number of custom Instinct MI450 GPUs and EPYC CPUs. This deal comes after a new agreement between Meta and Nvidia. This means that Meta is investing in both AMD and Nvidia AI hardware.

AMD’s deal is a multi-year, multi-generational agreement that will see Meta purchase the latest AMD hardware. This deal will reportedly align Meta and AMD’s partnership and see both companies collaborate to align their CPU, GPU, systems, and software roadmaps. AMD’s press release includes mentions of AMD’s next-generation Zen 6 EPYC “Venice” CPUs and future EPYC “Verano” CPUs.

This Meta AI deal looks a lot like AMD’s OpenAI deal

One major aspect of this deal is Meta’s “performance-based warrant”, which could see Meta gain up to 160 million shares of AMD common stock. If Meta reaches certain milestones, they will be rewarded with tranches of shares. One tranche will be unlocked when Meta purchases 1GW of AMD Instinct GPUs, and others will unlock at higher milestones. This deal could see Meta take up to a 10% stake in AMD. That said, one condition is that AMD’s share price needs to increase by more than 3x for Meta’s full stock award to be achieved.

AMD’s deal with Meta is similar to their deal with OpenAI. If OpenAI purchases 6 Gigawatts of AMD’s AI hardware, it could own 160 million AMD shares. If both companies meet their purchasing targets, a large portion of AMD could be owned by its AI customers.

The Wall Street Journal says that this deal is worth more than $100 billion. Each Gigawatt of compute is reportedly worth tens of billions in revenue for AMD. While this is good news for AMD, it remains to be seen whether Meta will purchase 6 GW of AI hardware. If Meta pulls back its AI spending, this deal will be worth much less than $100 billion. Remember, this is not a guarantee that Meta will purchase the full 6GW. The term “up to” does a lot of heavy lifting here.

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