AMD and Meta strike $100 billion AI deal that includes 10% stock deal — 6 gigawatt agreement includes up to 160 million AMD shares

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AMD's share price has to hit $600 for the stock award to be fully realized

AMD Lisa Su
(Image credit: Getty / Caroline Brehman)

AMD and Meta have just announced another colossal AI chip deal, believed to be worth over $100 billion. The new partnership will see AMD provide up to 6 gigawatts of AMD Instinct computing power to power Meta's AI ambitions. The deal includes a colossal performance-based share incentive that could see Meta awarded with up to 160 million AMD shares, roughly 10% of the company's total stock.

AMD chair and CEO Lisa Su confirmed the partnership with Meta was a "multi-year, multi-generation collaboration," and Meta CEO Mark Zuckerberg also stated the partnership was long-term. Hinting at the company's AI ambitions, Meta's founder noted plans to deliver "personal superintelligence."

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AMD says that Meta will be a lead customer for its sixth-generation AMD EPYC CPUs, as well as its Verano next-generation EPYC processors.

Crucially, the deal includes a generous stock incentive. AMD says it has issued Meta with "a performance-based warrant" of up to 160 million shares of AMD common stock, which is set to vest "as specific milestones associated with Instinct GPU shipments are achieved." The first such tranche of shares will vest with the first gigawatt shipments, with additional tranches scaling as Meta buys up more compute capacity. Essentially, AMD is rewarding Meta with shares in its company in exchange for buying its GPUs. The deal is identical in scope to the OpenAI and AMD partnership announced in October, with the same 6 gigawatt chip offering and 10% shares of AMD in return.

According to the Wall Street Journal, the deal is worth more than $100 billion, with each gigawatt of compute alone worth tens of billions in revenue for AMD. Regarding the stock deal, AMD has reportedly given Meta warrants to buy up to 160 million shares at $0.01 each. To reach the full stock award, AMD's share price needs to hit $600. It is trading just below $200 currently.

The news follows an announcement last week that Meta will also deploy standalone Nvidia Grace CPUs in its production data centers, a move it says will deliver a sizeable leap in performance-per-watt for its facilities.

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Stephen Warwick
Stephen Warwick
News Editor

Stephen is Tom's Hardware's News Editor with almost a decade of industry experience covering technology, having worked at TechRadar, iMore, and even Apple over the years. He has covered the world of consumer tech from nearly every angle, including supply chain rumors, patents, and litigation, and more. When he's not at work, he loves reading about history and playing video games.

7 Comments Comment from the forums
  • Gururu
    Meta owning 10% of AMD is horrible news but I am sure Zuckerberg will help them navigate AI.
    Reply
  • -Fran-
    When are we going to start calling them "Tech Cabals"? Well, I'm guessing it's no secret plot, but still.

    Also, why USD$100000M? Is that like a good luck number or something?

    Regards.
    Reply
  • LordVile
    Yeah trading stock for overinflated prices is going to do real well when this bubble pops
    Reply
  • TerryLaze
    -Fran- said:
    Also, why USD$100000M? Is that like a good luck number or something?

    Regards.
    It's 160 million shares,
    if AMD stock price ever reaches $600 (part of the deal) ,in that case 160mil times $600 = 96bilion.
    Reply
  • bigdragon
    Doesn't this count as stock dilution? Seems like a lot of shares to bet on AI, and a massive source of risk to expose other AMD investors to. I know there are performance-based requirements, but those requirements are unlikely to be missed given how much effort is going into pumping up AI.
    Reply
  • TerryLaze
    bigdragon said:
    Doesn't this count as stock dilution? Seems like a lot of shares to bet on AI, and a massive source of risk to expose other AMD investors to.
    It's meta, the risks are lower than minimal, and while it is diluting the stock now the point is that this will strengthen AMD financially which should make their stock stronger in the future.
    bigdragon said:
    I know there are performance-based requirements, but those requirements are unlikely to be missed given how much effort is going into pumping up AI.
    The stock has to reach $600....I very much doubt that will happen.
    But besides that, that would be great for AMD because that would mean that they would get paid all of the agreed upon money.

    I just don't know how AMD is supposed to manufacture that many CPUs/GPUs while TSMC is booked solid for years...
    Reply
  • SkyBill40
    That's a pretty significant target to aim for and a likely unattainable one at that. I understand going for the lofty stuff as a means of reward, but the market will need to skyrocket for it to get even most of the way there.
    Reply