Meta may trade AI chips for shares in its latest AMD deal

Source: Engadget

Overview

Meta has struck a deal with AMD to buy up to six gigawatts of AI chips. The agreement could see AMD issue Meta up to 160 million shares of its common stock if GPU shipment milestones are met, potentially giving Meta ownership of up to 10 % of AMD when fully completed.

Deal Details

• GPU Purchase: Meta will purchase six gigawatts of AMD Instinct GPUs based on the MI450 architecture, optimized for Meta’s workloads. The first gigawatt deployment is slated for the second half of 2026.
• CPU Expansion: The partnership also expands the existing EPYC CPU collaboration, with Meta planning to deploy “millions” of AMD EPYC CPUs and becoming a launch customer for AMD’s sixth‑generation EPYC processors.
• Equity Vesting:
  • The first tranche of AMD common stock vests with the delivery of the initial gigawatt of GPUs.
  • Additional tranches vest as Meta scales to the full six gigawatts.
  • Vesting is tied to AMD hitting specific stock‑price thresholds and Meta achieving defined technical and commercial milestones.

The structure mirrors a similar arrangement AMD made with OpenAI last year, where AMD could acquire up to a 10 % stake in exchange for six gigawatts of Instinct GPUs.

Implications

• Circular Transactions: Analysts note that such deals create intertwined dependencies between AI firms and chip makers, potentially amplifying losses if AI demand falls short of market expectations.
• Diversification from NVIDIA: The agreement highlights AI companies’ interest in diversifying away from NVIDIA, positioning AMD as a key alternative.

“By diversifying our partnerships and technology stack, we’re building a more resilient and flexible infrastructure,” Meta said in its news release.

Source

This article originally appeared on Engadget: