Advanced Micro Devices (AMD 3.13%) stock surged 6.1% in the first 10 minutes of trading Tuesday (9:40 a.m. ET) after announcing an "expanded strategic partnership" with Meta (META 2.41%):
Meta will buy 6 gigawatts-worth of AMD GPUs for artificial intelligence.
Image source: Getty Images.
Details, please
This partnership aims to help Meta "rapidly scale AI infrastructure and accelerate the development and deployment of cutting-edge AI models," say the companies. And this partnership will be "multi-year," and span "multi-generation[s]" of AMD chips.
The expanded partnership will begin with shipments of AMD Instinct GPUs and sixth-generation AMD Venice and Verano EPYC CPUs in the back half of 2026. Initially, the GPUs will be based on AMD's newest MI450 architecture. The "multi-generation" aspect of the deal, however, implies Meta will keep buying AMD chips as capabilities advance.
All the GPUs and CPUs AMD sells to Meta will be tailored for "rack-scale architecture" -- meaning they'll be designed specifically for data centers.
NASDAQ: AMD
Key Data Points
What's it mean for AMD?
Meta frames this partnership as a move to "diversify our compute" (as Mark Zuckerberg puts it) -- making sure Meta doesn't become too dependent upon AI chips from Nvidia.
To AMD CEO Dr. Lisa Su, though, the big significance is that this partnership secures a major long-term customer for its most advanced AI GPUs and CPUs. At the same time, allying with Meta puts AMD "at the center of the global AI buildout."
Sidenote: To further cement the partnership (and win the sale), AMD agreed to give Meta a stock warrant to buy, from time to time, "up to 160 million shares of AMD common stock." Given AMD's current 1.6 billion share count, this deal could result in Meta owning 10% of AMD.
Do you think that might foreshadow Meta buying even more chips from AMD in the future?
I do.
