Advanced Micro Devices just got the kind of validation that money can’t buy. Except in this case, it literally did buy it, to the tune of what the Wall Street Journal estimates at more than $100 billion.
AMD shares surged as much as 14% in pre-market trading Tuesday after the chipmaker announced a landmark multi-year partnership with Meta Platforms to deploy up to 6 gigawatts of AMD Instinct GPUs across Meta’s sprawling AI infrastructure. It’s the second deal of this exact structure AMD has landed in five months, following its identical 6-gigawatt agreement with OpenAI back in October. The pattern is unmistakable: the biggest AI builders on the planet are hedging their Nvidia dependency, and Lisa Su’s AMD is the beneficiary.
The Deal Structure: GPUs, CPUs, and a 10% Equity Kicker
Here’s how it works. Meta has committed to deploying AMD’s Instinct GPUs across multiple chip generations, starting with a custom variant built on the MI450 architecture that Meta itself helped design. The first gigawatt of shipments kicks off in the second half of 2026, powered by AMD’s Helios rack-scale architecture and paired with sixth-generation EPYC “Venice” CPUs running the ROCm software stack.
But the equity component is where things get interesting. AMD issued Meta performance-based warrants for up to 160 million shares of common stock at a strike price of one cent per share. If fully vested, that would give Meta roughly a 10% stake in the chipmaker. The catch: vesting is tied to shipment milestones, technical deliverables, and AMD’s stock price hitting $600, roughly triple its current level near $197.
It’s the exact same playbook AMD used with OpenAI. Same 6-gigawatt commitment. Same 160 million warrant shares. Same $600 price threshold. Some industry observers have called the structure “circular financing,” but the market clearly doesn’t care about the label. AMD was trading around $218 in pre-market, a jump of more than $20 per share.
Why Meta Is Buying AMD When It Just Committed to Millions of Nvidia GPUs
The timing here is notable. Just one week ago, Meta announced a multi-billion dollar commitment to deploy millions of Nvidia processors, becoming the first hyperscaler to adopt standalone Nvidia Grace CPUs in production. AMD shares actually dropped 4% on that news.
So why turn around and sign a deal of this magnitude with AMD seven days later? Because Meta has plans for 30 data centers, including 26 in the U.S. The company spent $72 billion on AI infrastructure in 2025 and has guided for up to $135 billion in capex this year. At that scale, single-vendor dependency isn’t just risky; it’s operationally untenable.
“Meta is in a unique position to control the full stack and they can use whoever’s compute they want,” said chip analyst Ben Bajarin of Creative Strategies, who was briefed on the deal. “It’s just a punctuation point on the fact that we are compute constrained, and deals will be done across the board.”
Mark Zuckerberg framed it explicitly as supply chain diversification. “I expect AMD to be an important partner for many years to come,” he said, while Santosh Janardhan, Meta’s infrastructure chief, explained that the sheer scale of the company’s buildout requires multiple silicon suppliers.
The Custom Chip Angle Is the Real Story
What separates this deal from a standard GPU purchase order is the customization. Meta helped shape the MI450’s design, optimizing it specifically for inference workloads, the computational process that generates AI model responses to user queries. The chip uses a chiplet-based architecture that allows greater customization flexibility compared to earlier monolithic designs.
This is a direct challenge to Broadcom’s position as the leading custom AI chip designer. AMD CEO Lisa Su framed the competitive dynamic bluntly: “Meta has a lot of choices. I want to make sure that we are always a clear seat at the table when they think about what they need next.”
The partnership also extends beyond GPUs. Meta will serve as lead customer for the next two generations of AMD EPYC server processors, having already deployed millions of the chips across its global infrastructure. One of those CPU variants will be custom-engineered to balance high performance with efficient power consumption.
The Numbers That Matter for AMD Investors
AMD CFO Jean Hu said the partnership is expected to drive “substantial multi-year revenue growth” and be accretive to non-GAAP earnings per share. According to Su, each gigawatt of computing capacity represents chip revenue measured in “double-digit billions” of dollars. With up to 6 gigawatts on the table, the total value is staggering, though the critical qualifier is “up to.” Meta is not obligated to purchase the full 6 GW.
AMD reported Q4 2025 revenue of $10.27 billion, up 34% year over year. The company’s market cap sits around $320 billion, a fraction of Nvidia’s $4.66 trillion valuation. Nvidia controls roughly 90% of the AI accelerator market and reports earnings Wednesday, making this week a high-stakes showdown for semiconductor investors.
With both OpenAI and Meta now locked into identical deal structures, AMD has the kind of revenue visibility it has never had before. The question shifts from whether AMD can compete with Nvidia to whether it can execute at gigawatt scale. First shipments are scheduled for the second half of this year, and the clock is ticking.
What This Means for the AI Chip Race
Two of the world’s most important AI builders have now signed nearly identical deals with AMD within five months. OpenAI in October. Meta in February. The combined commitment: 12 gigawatts of AMD Instinct GPUs, warrants for up to 320 million shares, and a potential path for both companies to own significant chunks of the chipmaker.
That’s not a one-off win. That’s a pattern. And it tells you something fundamental about where the AI infrastructure market is heading: the biggest spenders cannot afford to be dependent on a single supplier, no matter how dominant Nvidia remains. Compute demand is so enormous that there’s room at the table for multiple chip vendors, and AMD has positioned itself as the clear number two.
The real test comes in the second half of 2026, when those first MI450 racks need to actually ship, install, and perform. If AMD delivers, the $600 stock price target embedded in those warrants starts looking less aspirational and more inevitable. If it stumbles, these deals stay impressive on paper and disappointing in practice.
For now, the market has made its verdict clear. AMD stock is up double digits, and the AI chip race just got significantly more competitive.
