AMD and Meta announced a sweeping partnership today that will reshape the competition for artificial intelligence computing power. The deal commits AMD to supply up to 6 gigawatts of graphics processing units to Meta, with the first shipments expected to arrive in the second half of 2026. The agreement is believed to be worth more than $100 billion and includes a stock incentive that could give Meta roughly 10 percent ownership of AMD.
Key Takeaways
- AMD will supply 6 gigawatts of custom Instinct GPUs based on the MI450 architecture to Meta
- First gigawatt deployment scheduled for late 2026, with shipments of additional capacity continuing through the multi-year deal
- Meta receives up to 160 million AMD shares as a performance-based warrant, roughly 10 percent of the company
- Deal includes EPYC CPUs, AMD Helios rack-scale systems, and ROCm software across multiple generations
Background
The partnership marks a significant shift in how major technology companies are building their AI infrastructure. For years, Nvidia has dominated the market for specialized chips that power artificial intelligence systems. But as AI costs have skyrocketed and companies like Meta face enormous expenses to build out their computing capacity, they're increasingly looking for alternatives.
Meta has been particularly aggressive in diversifying its chip suppliers. The company uses its own custom-designed accelerators called MTIA chips alongside purchases from multiple external vendors. This strategy allows Meta to reduce its dependence on any single supplier and negotiate better terms.
AMD has been pushing hard to capture share in the AI chip market. The company's Instinct line of GPUs competes directly with Nvidia's offerings. Today's announcement shows that AMD's efforts are gaining real traction with one of the world's largest technology companies.
Mark Zuckerberg, Meta's founder and CEO, said the company is excited about the partnership. "This is an important step for Meta as we diversify our compute," he stated. "I expect AMD to be an important partner for many years to come."
Key Details
The Hardware and Timeline
Meta will receive custom GPUs built on AMD's MI450 architecture, optimized specifically for Meta's workloads. These chips will be deployed using AMD's Helios rack-scale system, which was developed jointly by AMD and Meta through the Open Compute Project. The Helios architecture allows companies to scale their AI infrastructure at the data center level rather than just individual servers.
The first gigawatt of capacity will ship in the second half of 2026. That's a massive amount of computing power. To put it in perspective, one gigawatt represents enough electricity to power roughly 750,000 homes. The remaining capacity will arrive over the following years as Meta scales up its AI operations.
AMD will also supply its sixth-generation EPYC processors, codenamed Venice, along with its ROCm software stack. CPUs play a critical supporting role in AI infrastructure, handling tasks beyond what GPUs excel at. AMD emphasized that CPUs are "a strategic pillar of the AI compute stack" and become increasingly important as systems grow larger and more complex.
The Stock Deal
What makes this agreement unusual is the stock component. AMD has issued Meta a performance-based warrant for up to 160 million shares of AMD common stock. The shares will vest in tranches as Meta receives each gigawatt of GPUs. The first batch vests when Meta receives its initial 1 gigawatt, with additional batches vesting as deliveries continue.
The warrant structure ties vesting to AMD achieving certain stock price thresholds. Currently, AMD stock trades just below $200 per share. For Meta to receive the full 160 million shares, AMD's stock would need to reach $600. That's a significant jump, but it aligns AMD and Meta's interests in the long term.
"This multi-year, multi-generation collaboration across Instinct GPUs, EPYC CPUs and rack-scale AI systems aligns our roadmaps to deliver high-performance, energy-efficient infrastructure optimized for Meta's workloads," said Dr. Lisa Su, AMD's chair and CEO.
AMD's finance team signaled confidence in the deal's impact. The company expects the partnership to "drive substantial multi-year revenue growth and be accretive to our non-GAAP earnings per share," according to Jean Hu, AMD's chief financial officer.
What This Means
This deal is a watershed moment for AMD in the AI chip market. For years, Nvidia has faced limited competition in high-end AI accelerators. The company's dominance has allowed it to charge premium prices and maintain enormous profit margins. AMD's success in landing Meta as a major customer signals that alternatives are becoming viable.
For Meta, the partnership allows the company to manage its massive capital expenditure on AI infrastructure. The stock warrant component is clever for both sides. AMD gets a large, committed customer. Meta gets exposure to AMD's upside if the company succeeds in capturing more of the AI chip market.
The timing matters too. Meta has been investing heavily in AI capabilities, building out the infrastructure needed to support large language models and other advanced systems. The company is competing with OpenAI and other AI-focused firms while also trying to integrate AI into its core products like Facebook and Instagram. Reliable access to advanced computing power is essential to that strategy.
But this deal also reflects something broader about the AI industry. The costs of building and running these systems are becoming so enormous that even the richest companies need to carefully manage their spending. Diversifying suppliers helps companies negotiate better prices and avoid being locked into a single vendor's roadmap.
AMD's Instinct GPUs won't instantly dethrone Nvidia. Nvidia still has a massive lead in market share, software maturity, and customer relationships. But deals like this one show that Nvidia's grip on the market is loosening. Companies are willing to take on the complexity of working with multiple suppliers if it saves money and reduces risk.
The AI chip market is becoming less of a monopoly and more of a competitive industry. That's good news for companies like Meta that need to buy chips in enormous quantities. It's also good news for AMD, which has invested billions in developing competitive products. Whether it's good news for Nvidia remains to be seen.
Frequently Asked Questions
When will Meta start receiving AMD chips?
The first gigawatt of capacity will ship in the second half of 2026. That means Meta should begin deploying these chips in its data centers sometime between July and December of this year. The remaining capacity will arrive over subsequent years as the multi-year deal unfolds.
What happens if AMD's stock doesn't reach $600?
Meta won't receive the full 160 million shares if AMD's stock doesn't hit that price. However, the warrant structure includes multiple tranches that vest at different milestones. Even if the stock price doesn't reach $600, Meta will still receive shares as it takes delivery of each gigawatt of GPUs, as long as AMD achieves certain stock price thresholds along the way.
How does this compare to Meta's relationship with Nvidia?
Meta is a major customer of Nvidia's chips as well. This deal doesn't mean Meta is abandoning Nvidia. Instead, Meta is diversifying its supply chain and reducing its dependence on any single vendor. The company also develops its own custom chips through its MTIA program. By working with multiple suppliers, Meta gains negotiating use and reduces the risk that a single company's problems could disrupt its operations.
Frequently Asked Questions
When will Meta start receiving AMD chips?
The first gigawatt of capacity will ship in the second half of 2026. That means Meta should begin deploying these chips in its data centers sometime between July and December of this year. The remaining capacity will arrive over subsequent years as the multi-year deal unfolds.
What happens if AMD’s stock doesn’t reach $600?
Meta won’t receive the full 160 million shares if AMD’s stock doesn’t hit that price. However, the warrant structure includes multiple tranches that vest at different milestones. Even if the stock price doesn’t reach $600, Meta will still receive shares as it takes delivery of each gigawatt of GPUs, as long as AMD achieves certain stock price thresholds along the way.
How does this compare to Meta’s relationship with Nvidia?
Meta is a major customer of Nvidia’s chips as well. This deal doesn’t mean Meta is abandoning Nvidia. Instead, Meta is diversifying its supply chain and reducing its dependence on any single vendor. The company also develops its own custom chips through its MTIA program. By working with multiple suppliers, Meta gains negotiating leverage and reduces the risk that a single company’s problems could disrupt its operations.
