Meta has struck a multi-billion dollar chip deal with AMD that might lead to the company acquiring a 10% stake in the chipmaker, boosting AMD's stock prices significantly.
Meta has entered into a landmark multi-billion dollar agreement with AMD that could result in the tech giant acquiring a 10% ownership stake in the semiconductor company. This deal not only involves Meta securing customized AI chips but also reflects a strategic partnership as Meta races to develop and implement its AI models effectively. AMD has granted Meta a performance-based authorization allowing the company the option to purchase up to 160 million shares at a nominal exercise price, contingent upon continued processor purchases, fostering a potentially lucrative relationship for both parties.
The agreement is indicative of the recent trend within the tech industry toward 'circular agreements' where companies form partnerships that benefit both sides. It mirrors AMD's previous arrangement with OpenAI that was made in late 2025, allowing OpenAI to secure a similar stake in the chip manufacturer over time as it expands its technological offerings. Such strategic alliances are pivotal, particularly in a rapidly evolving market like artificial intelligence, where specialized chips are essential for performance and innovation.
With AMD's market capitalization now standing at approximately $320 billion, the remarkable increase in its stock price by 14% following the announcement underscores the market's positive outlook on this deal. This partnership positions both Meta and AMD to leverage their strengths in AI, driving advancement in a field that continues to experience unprecedented growth and interest from investors globally. The future operations and synergies resulting from this agreement could significantly influence the tech landscape in the coming years.
