Meta, the parent company of Facebook, Instagram, and WhatsApp, has entered into a significant five-year deal with semiconductor giant AMD worth $60 billion to procure artificial intelligence chips. This agreement comes at a time when the tech industry is facing scrutiny over the substantial investments being made into AI technology, raising concerns about a potential bubble. Alongside the chip purchases, Meta will also acquire a 10% stake in AMD, highlighting its commitment to bolstering AI capabilities.

This deal mirrors AMD's prior agreement with OpenAI, demonstrating AMD’s growing influence in the AI chip market and the strong demand for its products. AMD's CEO Lisa Su announced that the company will supply 6 gigawatts (GW) of chips to Meta, starting with 1GW of their upcoming MI450 hardware expected in the latter half of the year. Additionally, Meta’s partnership with AMD extends to graphic processing units (GPUs) and central processors (CPUs), including a specialized variant designed for AI applications, signifying a strategic enhancement of Meta's infrastructure in artificial intelligence.

The broader implications of this deal could be substantial for both companies, as it indicates a strong belief in the future growth of AI technologies, despite the current concerns surrounding AI market dynamics. Furthermore, with Meta also collaborating with other major players like Nvidia, it illustrates the competitive and rapidly evolving landscape of AI chip technology, which may have lasting effects on the tech industry’s trajectory and investment strategies going forward.