Meta said on Tuesday that it would purchase billions of dollars worth of semiconductors from Advanced Micro Devices to develop artificial intelligence technologies and power new data centers.
As part of the multiyear deal, Meta is buying a volume of chips equivalent to up to six gigawatts of electricity, enough to power more than five million homes. The social media giant can also take a financial stake of up to 10 percent of the chip developer, the two companies announced.
AMD’s chief executive, Lisa Su, is using creative deal making to elbow her company’s way into an A.I. chips market that has been dominated by Nvidia, the world’s most valuable company. In October, AMD struck a similar deal with OpenAI to provide chips and a financial stake in exchange for an agreement to buy its chips.
The partnership with Meta would help place AMD “at the center of the global A.I. build out,” Ms. Su said in a statement.
Nvidia pioneered the A.I. chip industry and claims a more than 90 percent share of the market. It has long counted OpenAI and Meta among its biggest customers.
Nvidia has been charging a premium for its chips, which outperform rivals’ offerings. But its high prices have made it costly for customers like Meta and OpenAI to build data centers. As a result, those businesses have begun to look for alternative chip providers.
Companies like to have choices to keep costs down, said Patrick Moorhead, president of Moor Insights & Strategy. He added that AMD had overhauled its chip design and supercomputers and created a product that’s more competitive with Nvidia. “Nobody thought AMD was a serious contender, but this says it’s not a one-hit wonder and has a strategy” he said.
AMD’s stock jumped more than 10 percent in premarket trading. Nvidia’s stock fell slightly.
Meta said the deal was part of an effort to “diversify” the technology behind its data center infrastructure. AMD said that it would build chips to Meta’s specifications and that shipments would begin in the second half of 2026.
Meta also remains a major Nvidia customer. Last week, it agreed to spend billions of dollars on millions of Nvidia chips. The companies didn’t provide how many gigawatts of power the purchase would support.
Adam Satariano is a technology correspondent for The Times, based in London.
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