AMD and Meta Forge AI Chip Partnership with Innovative Equity Tie-up

AMD has announced a groundbreaking five-year agreement with Meta to supply artificial intelligence (AI) chips and equipment, with a total value expected to range between $60 billion and over $100 billion. Under the deal, Meta will purchase up to 6 gigawatts of computing power from AMD over the next five years, with the first batch of devices featuring the next-generation MI450 chips set to be deployed in the second half of this year.

Innovative Financial Structure to Secure Long-Term Collaboration

A major highlight of this deal is the innovative equity tie-up structure. Meta will receive warrants to purchase up to 160 million shares of AMD stock at a price of $0.01 per share. Should the two companies achieve specific technical and commercial milestones, and if AMD’s stock price hits the target of $600, Meta could eventually own approximately 10% of AMD, making it one of the company’s core shareholders. Goldman Sachs analysts note that this structure is similar to the collaboration model announced by OpenAI in October 2025—Meta trades potential equity for AMD’s deeply customized services and long-term supply commitments, while AMD accepts future equity dilution in exchange for locking in high-value, long-term contracts with major cloud providers.

Deep Customization to Meet Specific Demands

At the heart of this collaboration is a highly customized hardware solution. AMD will provide Meta with several generations of products, including bespoke CPUs, optimized for Meta’s low-energy and high-performance needs. The semi-custom MI450 GPUs, specifically tailored for Meta's workloads, are expected to start shipping in the second half of 2026. This partnership will boost AMD’s non-GAAP earnings per share.

Market Reaction and Institutional Views

Goldman Sachs sees this deal as a significant positive for AMD, offering greater certainty in the company’s market share among leading large-scale cloud service providers. Due to the dual binding of equity and product customization, Meta has strong incentives to prioritize AMD products. However, Goldman Sachs also points out that AMD’s substantial risk exposure with OpenAI and its relatively high operating expenses remain key reasons for maintaining a “neutral” rating. The firm indicated that it would take a more constructive view once it gains greater confidence in Meta and OpenAI’s deployment schedules through 2027.