AMD Stock Surges on Meta Chip Deal

Meta Platforms, the owner of Facebook and Instagram, announced a strategic partnership with AMD aimed at radically increasing the company's computing power. The deal includes deliveries of AMD Instinct series accelerators, which will form the foundation of a new generation of data centers. The total value of the investment, spread over the coming years, could reach 100 billion dollars, making it one of the largest contracts in the history of the semiconductor sector. Meta plans to deploy infrastructure with a total capacity of 6 gigawatts, which is intended to enable the creation of so-called "personal superintelligence," a key element of Mark Zuckerberg's vision. Competition in the graphics processor sector intensified after 2022, with the rapid rise in popularity of generative artificial intelligence. For decades, this market was dominated by Nvidia, which used its CUDA architecture to monopolize the high-performance computing segment, forcing competitors like AMD to seek alternative business cooperation models. The transaction structure is unique, as it combines hardware purchases with subscription warrants. Meta has obtained the right to acquire up to 160 million AMD shares at a price of $0.01 per share, subject to meeting specific order volume targets. Exercising these options would make Meta the largest shareholder in AMD with a ten percent stake. This decision is interpreted as an attempt to break Nvidia's market dominance and secure the supply chain in the face of global component shortages. 100 mld USD — maximum value of the Meta and AMD contract Experts point out that this move puts pressure on margins across the entire technology industry. While investors fear the creation of a speculative bubble in the AI sector, Meta declares its commitment to building a powerful computing infrastructure. „This partnership ties us to a market leader and validates the potential of our Instinct accelerators in the most demanding AI workloads.” — Lisa Su The stock market reacted enthusiastically to these reports, recording a sharp rise in AMD's share price, while Nvidia's shares came under slight selling pressure. Semiconductors have become a strategically significant raw material in the 21st century, comparable to oil in the last century. The global struggle for dominance in this field involves not only corporations but also state powers, leading to the phenomenon of techno-nationalism and the relocation of production to geopolitically secure regions.