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- Meta to buy AMD’s MI450 AI chips in deal worth over $100 billion
Meta to buy AMD’s MI450 AI chips in deal worth over $100 billion
Meta Platforms will buy AMD’s latest MI450 AI chips under a 6-gigawatt agreement that could exceed $100 billion. The deal includes a performance-based warrant allowing Meta to acquire up to a 10% stake in AMD, boosting its AI data centre expansion plans.
Meta Platforms will purchase artificial intelligence chips from Advanced Micro Devices (AMD) in a deal that also gives it the opportunity to acquire up to a 10 per cent stake in the chipmaker. Meta will buy AMD’s latest AI chips, the MI450, to help power its data centres. The 6-gigawatt agreement will support large-scale AI infrastructure expansion, with shipments for the first gigawatt deployment set to begin in the second half of this year. The overall agreement could potentially be worth more than USD 100 billion.
Comes days after Nvidia partnership
The AMD agreement comes just days after Meta announced a long-term partnership with Nvidia, under which it will use millions of chips and other equipment from the company for its artificial intelligence data centres.
AMD is seeking to keep pace with Nvidia amid the artificial intelligence boom, widely regarded as one of the most significant technological shifts since Steve Jobs unveiled the first iPhone.
AI chip race intensifies
Nvidia established an early lead by adapting its graphics processing units (GPUs) — originally designed for video games — to train advanced AI systems, including the technology behind tools like ChatGPT and image generators.
Demand for AI chips surged as the adoption of AI chatbots accelerated, prompting technology companies to secure large volumes of chips to build and operate their systems.
Rising AI spending raises questions
Although demand for AI chips remains strong, concerns are emerging about the scale of spending by companies such as Meta. Questions persist over whether massive investments in artificial intelligence infrastructure will translate into higher profits and improved productivity in the long term.
AMD shares jump after announcement
Following the announcement, AMD shares surged more than 9 per cent in pre-market trading on Tuesday, reflecting strong investor response to the scale of the partnership.
The companies said AMD has issued Meta a performance-based warrant for up to 160 million shares of its common stock at USD 0.01 per share. The warrant is structured to vest upon the achievement of specific milestones.
The first tranche will vest with the initial 1-gigawatt of shipments, while additional tranches will vest as Meta’s purchases scale up to the full 6 gigawatts.
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