{"id":"f-445134d771-52f90426-1662-538f-bb76-af97cd6e9118","title":"Meta Platforms to Acquire AI Chips from AMD in Potential $100 Billion Deal","description":"Meta Platforms has announced a deal to purchase AI chips from AMD, potentially worth over $100 billion, while aiming to enhance its AI capabilities amid stiff competition.","timestamp":0,"category":"business","headline":"Meta Platforms to Acquire AI Chips from AMD in Potential $100 Billion Deal","modifiedHeadline":"Meta Eyes $100 Billion AI Chip Deal From AMD","subCategories":["scid_4d81caea"],"subcategoriesName":["Companies"],"region":"IN","bundleMetaData":{"bundleId":"c35cfc57-1bba-4539-a24c-695ea99ac023","bundleTitle":"Mastering AI","cardData":null},"iabCategoryId":"597","fcSummary":"meta platforms is partnering with amd to secure ai chips, potentially acquiring up to 10% of the semiconductor firm in a deal valued over $100 billion. this follows meta's existing agreement with nvidia, bolstering its ai capabilities amid rising competition from google and openai. amd aims to strengthen its market position as ai demand surges, though concerns exist about investment returns.","summary":"Meta to buy AI chips from AMD in a potential $100B deal, boosting AI capabilities amid rising competition.","ctaUrl":"https://trends.glance.com/newz/news/IN/en/timesnow/f-445134d771-52f90426-1662-538f-bb76-af97cd6e9118","sourceUrl":"https://www.timesnownews.com/agency-news/meta-platforms-to-acquire-ai-chips-from-amd-in-potential-100-billion-deal-article-153687666","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/CbcCHjPDDFR0.webp","content":"

Meta Platforms, the parent company of Facebook, has entered into an agreement to purchase artificial intelligence chips from Advanced Micro Devices (AMD),

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which may also allow Meta to acquire up to a 10% stake in the semiconductor firm. This announcement follows Meta's recent partnership with Nvidia, where it plans to utilize millions of chips and additional equipment for its AI data centers, enhancing its technological capabilities.

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Details of the AMD Agreement

Under the terms of the deal, Meta will procure AMD's latest MI450 chips to support its data center operations. The agreement, valued at potentially over $100 billion, includes a 6-gigawatt provision, with shipments expected to commence in the latter half of this year.\n
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AMD's Competitive Positioning

AMD aims to enhance its market position amidst the growing demand for AI technology, which is recognized as a significant technological advancement comparable to the introduction of the first iPhone by Apple co-founder Steve Jobs.\n
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\nNvidia has established a strong foothold in the AI sector by adapting its graphics processing units (GPUs) from gaming applications to training sophisticated AI systems like ChatGPT and image generation technologies. The surge in AI chatbot usage has resulted in increased demand for chips, prompting tech companies to seek additional supplies.\n
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Concerns Over Investment Returns

Despite the high demand for AI chips, there are concerns regarding the substantial investments made by companies like Meta in AI technology and whether these expenditures will yield sufficient profits and productivity enhancements in the future.\n
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Meta's AI Strategy

Meta is intensifying its AI initiatives as it faces stiff competition from firms such as Google and OpenAI, the creator of ChatGPT. The company has recently invested $14.3 billion in AI data company Scale and appointed its CEO, Alexandr Wang, to lead a team focused on developing advanced AI capabilities. Additionally, Meta acquired the AI startup Manus in December, further solidifying its commitment to enhancing AI features across its platforms.\n
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Performance-Based Warrant

As part of the agreement, AMD has granted Meta a performance-based warrant for up to 160 million shares of its common stock at a nominal price of $0.01 per share, contingent on the achievement of specific milestones.\n
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\nThe initial tranche of shares will vest upon the completion of the first gigawatt of shipments, with subsequent tranches tied to Meta's increased purchases scaling to a total of 6 gigawatts.\n
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Market Reaction

Following the announcement of the deal, AMD's shares rose by more than 9% prior to the market opening on Tuesday, reflecting investor optimism regarding the partnership.\n
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Meta Platforms to Acquire AI Chips from AMD in Potential $100 Billion Deal

SUMMARY