Meta could end up owning 10% of AMD in new chip deal

Meta has struck a multi-billion dollar chip deal with AMD that could lead to the Facebook owner taking a 10 percent stake in the group, sending shares in the US chipmaker surging on Tuesday.

The social media giant said it would acquire customized chips with a total capacity of 6 gigawatts from AMD as it races to develop and deploy its AI models.

AMD’s chief executive Lisa Su said that “each gigawatt of compute is worth double-digit billions” under the deal.

AMD also issued Meta with a performance-based warrant, giving it the option to acquire up to 160 million AMD shares in tranches at an exercise price of $0.01, as the Facebook owner buys successive orders of processors.

The shares-for-chips arrangement represents the latest “circular” transaction in the industry and mirrors a deal AMD struck with OpenAI in October, in which the ChatGPT maker was offered a 10 ...