Meta to Invest $60 Billion in AMD Processors for AI Development

Meta Platforms, the owner of Facebook and Instagram, announced a strategic partnership with Advanced Micro Devices (AMD) aimed at radically increasing computing power for artificial intelligence models. Under the five-year contract, starting in the second half of 2026, AMD will deliver Instinct series graphics processors and central processing units (CPUs) with a total power capacity reaching 6 gigawatts. Lisa Su, CEO of AMD, described the scale of the order as taking the relationship with Meta to a completely new level. It is worth noting that the total infrastructure capacity of 6 gigawatts is an enormous scale, considering that typically one gigawatt is enough to power about 700,000 households. This investment is intended to allow Meta to build infrastructure capable of supporting the "personal superintelligence" mentioned by Mark Zuckerberg. The transaction structure is unusual and based on so-called circular financing. Meta will receive warrants to purchase up to 160 million AMD shares at a symbolic price of one cent each. The exercise of these rights is dependent on achieving milestones in hardware deliveries and on the AMD share price rising to the level of $600. If these rigorous market and operational conditions are met, Meta could become the owner of about 10% of AMD's share capital. Analysts point out that this is AMD's second such large agreement after last year's contract with OpenAI, confirming the company's aspirations to become the main alternative to Nvidia's chips, which currently controls the majority of the AI accelerator market. The graphics processing unit (GPU) market has undergone a transformation in recent years from the entertainment sector to the foundation of the modern digital economy. Since the launch of ChatGPT in 2022, demand for computing power has grown exponentially, driving semiconductor manufacturers' valuations to historic highs. Despite optimism on the stock market, where AMD shares gained over 14% in pre-market trading, some experts warn of a growing speculative bubble in the technology sector. Big Tech spending on AI infrastructure is already counted in hundreds of billions of dollars, while monetizing these solutions remains a challenge. Investors are also anxiously awaiting Nvidia's upcoming quarterly report, which is expected to be the ultimate test of the sustainability of the current boom. „It is a win-win from our shareholders' standpoint.” — Lisa Su From a market perspective, this agreement redefines the relationship between technology suppliers and customers. Meta, instead of being merely a client, becomes a strategic capital partner of its supplier. Such closer cooperation is intended to guarantee supply chain stability in the face of a global silicon shortage and growing competition for the computing resources necessary to train increasingly complex algorithms.