Facebook’s parent company Meta Platforms has secured a massive five-year agreement to purchase artificial intelligence processors worth up to $60 billion from chip manufacturer Advanced Micro Devices, the companies announced Tuesday from San Francisco.
The substantial contract permits the social media giant to potentially acquire as much as 10% ownership in the semiconductor company, marking AMD’s second major AI chip partnership following a similar arrangement with OpenAI established last year.
The agreement highlights the enormous demand for specialized processors within the artificial intelligence sector, as companies race to secure the computing power needed for AI operations. Meta has also negotiated separate arrangements with AMD’s primary competitor Nvidia for millions of additional AI processors.
According to AMD Chief Executive Lisa Su, the company will deliver six gigawatts worth of processors to Meta, beginning with one gigawatt of AMD’s upcoming MI450 flagship technology during the latter half of this year.
Beyond AMD’s premier graphics processing units, Meta will also purchase central processing units, including specially modified versions designed specifically for the social media platform’s requirements.
Su explained that the customized processors will be engineered to maximize performance while minimizing power usage. The arrangement encompasses two generations of AMD’s central processing technology.
“So no question Mark is very, very ambitious in what he wants to accomplish, and we want to use every aspect of our technology to really help Meta to accomplish that,” Su stated, referencing Meta’s CEO Mark Zuckerberg.
Meta contributed to developing the MI450 design, which is specifically optimized for inference computing – the process that enables chatbots like OpenAI’s ChatGPT to respond to user questions.
Industry experts anticipate that the market for inference equipment will eventually exceed the market for hardware used to construct the foundational AI models.
Under the agreement’s terms, AMD will provide a warrant for 160 million shares priced at one cent per share.
The warrant will become available gradually throughout the deal’s duration, activating when AMD’s stock reaches increasing performance benchmarks up to $600. Beyond stock price goals, Meta must also meet “technical and commercial considerations” for each portion of the warrant.
“Meta is making a big bet on AMD,” Su remarked.
AMD shares finished Monday’s trading session at $196.60.
Meta intends to maintain purchasing relationships with multiple chip suppliers while simultaneously developing its own internal processors, according to Santosh Janardhan, Meta’s infrastructure director, who spoke during the reporter briefing. Sources indicate Meta has been exploring the use of Google’s tensor processing units for AI applications.
Janardhan noted that the massive scale of Meta’s data center construction and infrastructure development necessitates working with multiple chip manufacturers and technological approaches.
“All of the chip makers end up having sort of a seat at the table,” Janardhan explained.
