"Meta will be a lead customer for 6 th Gen AMD EPYC CPUs, codenamed “Venice,” and “Verano,” a next-generation EPYC processor designed with workload-specific optimizations to deliver leadership performance-per-dollar-per-watt." AMD's statement says. Following the announcement, AMD discussed the deal in a conference call . CEO Dr. Lisa Su said that AMD plans to ship a custom MI450-based accelerator, optimized for Meta's workloads specifically, with the first deployment of its hardware expected in the second half of 2026, with the hardware itself currently in a hardware and software validation phase.
"The Meta deployment is expected to generate data center AI revenue of significant double-digit billions of dollars per gigawatt. Revenue will begin in the second half of 2026 and ramp alongside our MI450 deployment with other customers," said Jean Hu, CFO at AMD.
During a Q&A in the call, Vivek Arya at BofA Securities raised an important point: If demand is so strong for AMD's AI accelerators, why is the company effectively giving away equity to secure orders? This isn't the first deal of its kind, almost exactly mirroring OpenAI's deal from October 2025. Su argues that such deals are beneficial for AMD shareholders, as it guarantees a certain level of earnings to show off to shareholders, and help AMD shape its own roadmap, as the companies co-develop hardware, and will continue to do so for the duration of the deal.
"So if you look at the structure of our warrants in this case, is — again, it's a very aligned incentive structure. Meta is making a big bet on deploying at large scale for AMD, which is great. AMD benefits from this large-scale deployment, which brings revenue scale, ecosystem maturity, and software maturity. And assuming that we satisfy all of the purchases as well as the share price thresholds, AMD shareholders will benefit significantly, and Meta gets to benefit as part of that." Su said.
In short, in exchange for equity, AMD gets to deliver a certain guarantee of orders, and in turn, value for its shareholders. Earlier in the call, Su noted that the deal would help AMD's long-term financials. In particular, the company aims for 80% of its Compound Annual Growth Rate (CAGR) to be attributed to data centers and AI. Once that goal has been achieved, the company could equate a $20 value per-share to its data center efforts, which AMD aims to achieve before 2031.
This stands in stark contrast to Nvidia, which is not offering up equity for orders — the customers line up anyway. If AMD delivers on its commitments with both Meta and OpenAI, it will have deployed 12 gigawatts in compute and have given up 20% of the company in return for locking-in AI accelerator buy-in. As long as the company's shares rise to $600 by 2031, that might become a new reality for one of the chip industry's longest-standing companies.
Sayem Ahmed is the Subscription Editor at Tom's Hardware. He covers a broad range of deep dives into hardware both new and old, including the CPUs,\u00a0GPUs, and everything else that uses a semiconductor. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-17/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Sayem Ahmed Social Links Navigation Subscription Editor Sayem Ahmed is the Subscription Editor at Tom's Hardware. He covers a broad range of deep dives into hardware both new and old, including the CPUs, GPUs, and everything else that uses a semiconductor.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/inside-meta-amd-deal#main
- https://www.tomshardware.com
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