Meta has struck a multi-billion dollar chip deal with AMD that could result in the social media giant acquiring a 10 percent stake in the chipmaker. The agreement involves Meta purchasing customized AI chips with a total capacity of 6 gigawatts from AMD as part of its massive infrastructure expansion. Under the terms, AMD issued Meta a performance-based warrant allowing it to acquire up to 160 million AMD shares at $0.01 per share.

AMD CEO Lisa Su stated that each gigawatt of compute under the deal is worth double-digit billions, though she didn't specify exact figures. The arrangement mirrors a similar deal AMD made with OpenAI in October, offering the ChatGPT maker a 10 percent stake over time. Meta will receive its first tranche of AMD shares in the second half of 2025 when the initial gigawatt of chips ships, with the warrant expiring in February 2031.

This transaction represents the latest example of "circular" financing in the AI infrastructure boom, where tech giants and chipmakers create increasingly creative funding arrangements. Meta plans to almost double its AI infrastructure spending this year to as much as $135 billion, making it one of AMD's biggest AI chip customers. The deal also signals Big Tech's efforts to diversify away from market leader Nvidia, which recently announced its own multiyear agreement with Meta to supply millions of chips.