AMD secures Meta as AI chip customer, risking up to 20% of its equity in mega deal.

AMD’s new partnership with Meta marks the chipmaker’s biggest AI‑customer win since its 2024 deal with OpenAI, and it comes with an equity kicker that could reshape the balance of power in the data‑center market. Under the agreement, Meta will purchase up to six gigawatts of AMD Instinct GPUs built on the MI450 architecture, with the first gigawatt slated for delivery in the second half of 2026, according to Engadget. Each gigawatt tranche triggers the issuance of a block of AMD common stock, and if Meta hits the full six‑gigawatt milestone the company could receive as many as 160 million shares – roughly 10 % of AMD’s outstanding equity. The equity component vests only after AMD meets specific stock‑price thresholds, tying Meta’s upside to the chipmaker’s market performance.

The deal also deepens AMD’s CPU relationship with Meta. In addition to the GPU commitment, Meta will become a launch customer for AMD’s sixth‑generation EPYC processors and will deploy “millions” of EPYC CPUs across its data‑center fleet, Engadget reports. The partnership expands the existing EPYC‑Meta collaboration that began with earlier generations of the server chip, and AMD will supply its next‑gen “Venice” and “Verano” CPUs alongside the MI450 GPUs. By bundling both GPU and CPU workloads, AMD hopes to lock Meta into a unified hardware stack that can be optimized for the social‑media giant’s proprietary AI models.

Financial analysts see the equity‑for‑chips structure as a high‑stakes bet for AMD. Wccftech notes that the agreement could expose the chipmaker to a “hefty 20 %” dilution if the stock‑price triggers are met, a figure that reflects the combined effect of the 10 % ownership stake and the potential for additional share issuances tied to performance milestones. Reuters’ coverage of the deal underscores that AMD is now the second major silicon vendor to secure a multiyear, multi‑gigawatt AI supply contract with Meta, following Nvidia’s Vera Rubin rack agreement announced earlier this month. The parallel deals suggest Meta is diversifying its hardware supply chain to avoid over‑reliance on a single vendor, while giving AMD a rare opportunity to capture a sizable slice of the fast‑growing AI infrastructure market.

From a strategic standpoint, the partnership gives AMD a foothold in the segment that Nvidia has dominated for years. Nvidia’s own multibillion‑dollar contracts with Meta, detailed in a separate Reuters report, are projected to be worth up to $50 billion, but AMD’s deal is differentiated by the equity component, which could align Meta’s long‑term interests with AMD’s stock performance. If Meta’s AI workloads scale as projected, the six‑gigawatt commitment could translate into hundreds of billions of dollars of hardware spend, a revenue boost that would complement AMD’s recent growth in data‑center sales. The equity upside also provides Meta with a non‑cash lever to offset the massive capital outlay required for AI infrastructure, a point highlighted by Engadget’s coverage of the transaction’s structure.

Investors are watching closely to gauge how the equity‑linked model will affect AMD’s balance sheet and shareholder value. The potential dilution risk has already prompted discussion among analysts, who note that a 10 % ownership stake by a single customer could introduce governance complexities and influence future strategic decisions. Nonetheless, the deal signals AMD’s confidence that its Instinct GPU roadmap and EPYC CPU platform can meet Meta’s demanding AI workloads, and it positions the company as a credible alternative to Nvidia in the race to supply the next generation of generative‑AI servers. As the first gigawatt of chips rolls out later this year, the market will get its first data point on whether AMD can deliver at scale and whether the equity incentive will prove a catalyst for sustained growth.