Meta and AMD Strike $100 Billion AI Chip Deal in Challenge to Nvidia's Dominance

February 24, 2026 · by Fintool Agent

AMDMETANVDA

Meta Platforms just handed Amd its second massive AI infrastructure contract in five months. The $100 billion-plus deal—structured nearly identically to AMD's October 2025 partnership with OpenAI—marks a definitive moment in the AI chip wars and comes just two days before Nvidia's quarterly earnings report. 1

AMD shares surged more than 9% in pre-market trading, climbing to $214.89 from Monday's close of $196.60.

The Deal Structure

Under the agreement announced this morning, Meta commits to purchasing up to 6 gigawatts of AMD Instinct GPUs across multiple chip generations. In return, AMD has issued Meta a performance-based warrant for up to 160 million shares of common stock—representing approximately 10% of the company—at an exercise price of just $0.01 per share. 3

The warrant vesting is tied to both purchase milestones and AMD's stock performance:

• First tranche: Vests upon delivery of the initial 1 gigawatt of AMD chips
• Subsequent tranches: Vest as Meta's purchases scale to 6 gigawatts
• Stock price hurdle: Full vesting requires AMD shares to reach $600—more than triple Monday's close 4

"We expect this partnership to drive substantial multi-year revenue growth and be accretive to our non-GAAP earnings per share," said Jean Hu, AMD's CFO. "The performance-based structure also tightly aligns AMD and Meta around execution and long-term value creation." 5

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The Technology Stack

The first 1-gigawatt deployment will utilize custom AMD Instinct GPUs based on the MI450 architecture, specifically optimized for Meta's AI workloads. The systems will run on AMD's Helios rack-scale platform—jointly developed with Meta through the Open Compute Project—combined with 6th Gen AMD EPYC "Venice" CPUs and ROCm software. 1

Beyond the MI450, Meta will be a lead customer for AMD's next-generation "Verano" EPYC processor, designed with workload-specific optimizations for AI infrastructure. 2

"We're excited to form a long-term partnership with AMD to deploy efficient inference compute and deliver personal superintelligence," said Mark Zuckerberg. "This is an important step for Meta as we diversify our compute. I expect AMD to be an important partner for many years to come." 3

AMD's 12-Gigawatt Empire

This deal doubles down on a playbook AMD unveiled in October 2025 when it struck an identical arrangement with OpenAI. That partnership—also for 6 gigawatts with 160 million share warrants—was described at the time as "expected to deliver tens of billions of dollars in revenue" for AMD. 4

Combined, AMD now has commitments for:

• 12 gigawatts of GPU capacity across OpenAI and Meta
• 320 million shares in potential warrant dilution
• $100+ billion in committed chip purchases

"In addition to our multi-generation partnership with OpenAI to deploy 6 gigawatts of Instinct GPUs, we are in active discussions with other customers on at-scale multi-year deployments," AMD CEO Lisa Su said on the company's Q4 earnings call three weeks ago. Those discussions have now materialized. 5

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Financial Context

AMD delivered record quarterly revenue of $10.3 billion in Q4 2025, with data center revenue reaching $5.4 billion—up 39% year-over-year. 1 For the full year, AMD generated $34.6 billion in revenue, up 34% year-over-year. 2

*Values retrieved from S&P Global

The company noted that 8 of the top 10 AI companies now use AMD Instinct GPUs to power production workloads—a dramatic expansion of its customer base. 9

The Nvidia Question

The timing is conspicuous. Nvidia reports Q4 FY2026 earnings on Wednesday, February 26. The chipmaker dominates AI accelerators with approximately 80% market share, having reported Q3 revenue of $57 billion—more than five times AMD's. 10

*Values retrieved from S&P Global

But the Meta deal signals that major hyperscalers are actively seeking alternatives. Meta has been "deploying millions of AMD EPYC CPUs and significant deployments of AMD Instinct MI300 and MI350 series GPUs across their global infrastructure," according to the announcement. 15

Meta's AI Spending Spree

Meta's capital expenditure has been staggering. The company spent $21.4 billion on capex in Q4 2025 alone 1, with full-year capex exceeding $69 billion. This AMD deal represents a strategic pivot in how those dollars are deployed.

*Values retrieved from S&P Global

Zuckerberg's comment about "diversifying compute" is telling. While Meta has been a major Nvidia customer, this deal—like its ongoing investments—suggests a deliberate strategy to avoid single-supplier dependency in AI infrastructure.

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What to Watch

Near-term catalysts:

• Nvidia earnings (Wednesday, February 26)—watch for commentary on competitive dynamics
• AMD's first MI450 shipments to Meta (H2 2026)
• Progress toward the $600 stock price threshold for full warrant vesting

Strategic implications:

• Whether other hyperscalers follow with similar AMD commitments
• AMD's ability to execute on the Helios platform at gigawatt scale
• Meta's inference workload performance on AMD silicon vs. Nvidia alternatives

For AMD, the math is straightforward. If both the OpenAI and Meta deals reach full scale, they represent over $100 billion in committed revenue over five years—roughly 1.5x AMD's entire 2025 revenue. The warrant dilution is significant—320 million shares represents about 20% of current outstanding shares—but only vests if AMD executes flawlessly and the stock triples.

"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 optimized for Meta's workloads," said Lisa Su, "accelerating one of the industry's largest AI deployments and placing AMD at the center of the global AI buildout." 1

Related: Amd | Meta Platforms | Nvidia