AMD and Meta reach five-year AI chip supply agreement

It is understood that the total amount of the agreement is estimated to be 60 billion US dollars, and it is a breakthrough agreement that Meta can obtain up to 10% of AMD's shares during the cooperation period. Once the news was announced, the market reaction was strong, and AMD's stock price surged more than 10% in pre-market trading, while its closing price on the previous trading day was $196.60. This deeply bound cooperation not only reshapes the AI chip market pattern, but also becomes a landmark case of the "equity for orders" model in the technology industry.

1、 Five year contract implementation: 60 billion yuan in amount, dual empowerment achieved through equity binding

The five-year AI chip supply agreement reached between AMD and Meta is not simply a product procurement cooperation, but a comprehensive strategic cooperation covering chip supply, technology collaboration, and equity binding. The deep binding, risk sharing, and benefit sharing between the two sides demonstrate a new trend of collaborative development among technology giants in the AI era. According to the core terms of the agreement, Meta will continue to purchase AMD chips and related server equipment designed specifically for AI models over the next five years. The total amount of the agreement is expected to reach $60 billion, and if calculated based on the standard of billions of dollars per gigawatt of capacity, the amount may even exceed the $100 billion mark.

Of particular note is the equity binding clause in the cooperation: Meta will receive a performance-based stock warrant to purchase up to 160 million shares of AMD common stock in batches during the cooperation period, and can hold up to approximately 10% of AMD's shares, becoming one of its core shareholders. The effectiveness of these warrants is directly linked to the progress of chip deployment and AMD's stock price milestones. The first batch of warrants will be granted when Instinct GPU shipments reach 1 gigawatt, and will gradually be unlocked as Meta purchases increase to 6 gigawatts. Some warrants can only be fully exercised when AMD's stock price reaches the target level of $600, while the current AMD stock price is only $196.60. This setting reflects both parties' confidence in the prospects of cooperation and forms a two-way binding mechanism of "orders and equity".

AMD CEO Su Zifeng stated that this collaboration will elevate the relationship between the two parties to a new level. AMD will tailor semi custom MI450 GPUs and sixth generation EPYC "Venice" CPUs for Meta's workloads, equipped with ROCm software and built on the Helios rack level platform. The first batch of products is expected to be shipped in the second half of 2026, helping Meta advance one of the industry's largest AI deployment projects. The global infrastructure manager of Meta stated that the deep cooperation with AMD is an important step towards achieving diversified computing power and breaking the dependence on a single supplier. At the same time, it can also deeply participate in the design direction of next-generation semiconductors, which is in line with the core needs of its AI business expansion.

2、 Strong market response: AMD surged more than 10% in pre-market trading, and valuation is expected to continue to rise

As a heavyweight cooperation in the field of AI chips, the five-year agreement between AMD and Meta, once announced, has attracted strong attention from the capital market, directly driving AMD's stock price to soar. It is reported that after the announcement, AMD surged more than 10% in pre-market trading in the US stock market, with its stock price reaching $216.26 at one point, a significant increase from the previous trading day's closing price of $196.60. This shows the high recognition of the market for this cooperation and also reflects investors' confidence in AMD's competitiveness in the AI chip field.

From the perspective of stock price trends, AMD has been performing steadily recently. The closing price on February 23rd was $196.60, and it continued to rise after the opening of the trading day on February 24th, with a closing price of $213.84, a daily increase of 8.77%. The trading volume surged to 81.367 million, with a turnover of $17.336 billion and a turnover rate of over 5%. The trading volume increased significantly compared to the previous trading day, demonstrating the pursuit of funds for this cooperation. Multiple institutions are also optimistic about AMD's future performance, believing that this long-term cooperation with Meta will bring stable revenue growth to AMD, while leveraging Meta's market influence to further increase its share in the AI chip market and drive the company's valuation to continue to rise.