Meta (META) and AMD (AMD) are entering into a multi-year agreement that will see Meta purchase more than 6 gigawatts of AI chips as part of its massive AI development.
As part of the deal, announced Tuesday, AMD will issue Meta 160 million shares of common stock that will vest in a series of tranches if AMD reaches certain milestones, the first of which will occur when AMD ships its first gigawatt of chips.
AMD shares closed at $196.60 on Monday.
“We expect this partnership to drive substantial revenue growth over multiple years and contribute to our non-GAAP earnings per share, marking another important step forward in delivering on our ambitious long-term financial model,” AMD Chief Financial Officer Jean Hu said in a statement.
“The performance-based structure also closely aligns AMD and Meta around execution and long-term value creation.”
The first GPUs, AMD’s MI450 line, will be deployed in the company’s Helios rack-scale data center systems with EPYC CPUs in the second half of the year.
Meta says it will also purchase a host of additional CPUs, including AMD’s Venice chip and its next-generation Verano processor. CPUs are becoming an increasingly important component for AI data centers as companies look to run agent AI services and focus on inference or execution models.
Last week, Meta announced a separate multi-year deal with AMD rival Nvidia (NVDA), through which the chipmaker will provide Meta with millions of its Blackwell and Rubin GPUs.
Nvidia also said that Meta will host the first large-scale deployment of its Grace CPU servers. Nvidia typically combines its Grace CPU with two of its Blackwell or Blackwell Ultra processors to form its GB200 and GB300 superchips that slot into its rack-scale platforms.
Meta’s deal with AMD comes as the company will spend more than $135 billion in capital expenditures throughout 2026 as part of its AI expansion plans. That will cover everything from data center construction and chips to training models.
Meta isn’t the only company investing heavily in AI this year. Meta, Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) collectively plan to spend about $650 billion on AI.
This has given some inventors pause as they consider whether the investments will pay off. Meta has fared the best among the group of big spenders, with its stock down just 2.5% since it reported earnings on Jan. 28 and announced its investment plans.
Google shares have fallen 8.7% since its own news, while Amazon shares have fallen 11.9%. Microsoft, however, has been the hardest hit since revealing its spending strategy, with a 15.5% drop.