Meta Signs $60bn Artificial Intelligence Chips Deal With AMD
The Facebook master has decided to acquire up to $60bn (£44.5bn) of artificial intelligence chips from the US semiconductor powerhouse. Advanced Micro Devices – even though there are concerns over the huge amounts invested in AI infrastructure initiatives.
It is another huge acquisition of the year where US tech companies are poised to invest more than 660bn in AI property and might be a subset of a wider shift in the AI strategy of Meta, according to an analyst at Forrester, Alvin Nguyen.
This five-year agreement is based on Meta acquiring 10% of the California chip company, which is the same concept as a partnership with OpenAI and AMD last year.
The two acquisitions highlight a trend by major AI participants to diversify their artificial intelligence chips offerings beyond what Nvidia offers, the larger competitor of AMD, said Nguyen. The shift indicates supply chain bottlenecks at Nvidia, the largest chipmaker in the world.
Meta also entered into an agreement with Nvidia separately to purchase millions of AI chips. According to Reuters, Google and Google met with Meta to utilise the company in AI tasks using its tensor processors (TPUs).
According to Nguyen, OpenAI was forced to become multi-vendor due to the fact that it reached the stage where its growth is capped by the need to stay tied to a single vendor (Nvidia). Meta is already big enough that it requires more than one choice.
AMD would provide 6GW of the chips to Meta, beginning with 1GW of the next-generation MI450 hardware of the company in the second half of this year, according to the chief executive of AMD, Lisa Su.
Meta spent huge sums on its own AI research last year, and it has been on a talent spending spree in which the social media company has tried to steal the best employees off its competitor – even with 100m signing bonuses.
This seemed to decelerate following the anxieties of an AI bubble that were extensively covered. Answer from Nguyen: Nguyen, nowadays, Meta appears to be diverging: shifting its focus off competing with other AI companies like OpenAI and Anthropic and onto data centres and other AI infrastructure.
The purchase of AMD can assist it in doing so, and so can its giant datacentre that is being built in Louisiana, which is estimated to cost billions.
Besides purchasing graphics chips (GPUs) used by AMD as the flagship, Meta will also purchase central processors (CPUs), with one being tailored to the needs of the social media platform.
The custom CPU would be configured to provide high performance and at the same time use minimum energy, Su said. The acquisition will involve two generations of AMD processors. “Meta is making a big bet on AMD,” she added.
Although the market share of AMD is much less in comparison with that of its largest competitor, Nguyen noted that the chipmaker was a good investment – its artificial intelligence chips are as good or even better, and the company also has technologies that enable Nvidia workloads to be translated to run on its systems. It is only the case that AI companies would one day also diversify to other chipmakers, including Intel.
Meta had planned to keep purchasing chips of other suppliers and build its own processors simultaneously, according to Santosh Janardhan, the company infrastructure head.
The decision by Meta to bet on AMD is after new agentic AI tools shook the markets, which led to a sell-off in software stocks in fear of AI displacing masses of jobs.
