Meta Inks $100B Chip Deal With AMD as Nvidia Calms AI Bubble Fears With Upbeat Q4 on Robust AI Demand

In a mega 5-year deal, Meta Platforms agreed to purchase 6 gigawatts of AI computing power from Advanced Micro Devices (AMD), estimated to be worth over $100 billion, despite investor concerns about rising AI spending.

Meta will purchase AMD's MI540 series of GPUs and its latest-generation CPUs. 'The CPU market is absolutely on fire. There is significant demand. It has continued to grow, and it really is a result of the AI infrastructure deployments as inferencing scales, as agentic AI scales, and our portfolio is in an extremely good position,' said AMD CEO Lisa Su. Meta will buy CPUs, including a variant customised for powerful performance while ensuring low energy consumption.

The deal could result in Meta owning 10% of the AMD stock. Under the agreement, AMD issued Meta a performance-based warrant for up to 160 million AMD shares for $0.01 apiece, which is designed to vest alongside multiple milestones. Note that the full stock award is reportedly contingent on AMD's share price reaching $600 per share.

'This multi-year, multi-generation collaboration across Instinct GPUs, EPYC CPUs, and rack-scale AI systems aligns our roadmaps to deliver high-performance, energy-efficient infrastructure optimised for Meta's workloads,' Su added.

The deal structure mirrors the partnership between OpenAI and AMD, reflecting an appetite among AI firms to diversify chip supply beyond Nvidia, as it expects supply chain headwinds in fiscal Q1 2027 and beyond amid the global memory chip shortage.

'We're excited to form a long-term partnership with AMD to deploy efficient inference compute and deliver personal superintelligence. This is an important step for Meta as we diversify our compute,' stated Meta CEO Mark Zuckerberg.

Meta spent aggressively into its AI initiatives in 2025, embarking on a talent acquisition spree in which the company attempted to poach top employees from rivals with massive signing bonuses.

NVIDIA Calms AI Bubble Fears With Upbeat Q4 Results

Meta's collaboration with AMD comes as new agentic AI tools rattle markets and continue to put downward pressure on software stocks, amid fears of AI integration leading to job displacement and rising infrastructure buildout capex without equivalent output.

However, Nvidia reported a fiscal Q4 beat and higher-than-expected Q1 revenue guidance, driven by strong demand for AI, calming investor fears that higher spending on AI hardware might not be sustainable in the long run.

Nvidia CEO Jensen Huang said yesterday that the markets miscalculated the AI threat to the enterprise software industry. He explained that software firms will leverage agentic AI for software development and enhanced operational efficiency, adding that AI won't replace software tools but will use them.

Even financial expert Jim Cramer said that fears of an AI-driven existential threat for software firms were overblown. 'The software companies are survivors. They can merge. They can adapt. They can do whatever is really necessary to get it so they stay in business,' Cramer said Wednesday. 'They're priced for perfection, though, and they do seem to have, let's say, kind of a rugby-scrum feel about them — and we don't pay up for scrum.'

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