Meta to buy AI chips from AMD in deal potentially worth $100 billion

Meta Platforms , the parent company of Facebook, has signed a massive agreement with Advanced Micro Devices (AMD) to purchase artificial intelligence (AI) chips , a deal that could exceed USD 100 billion and includes the option for Meta to acquire up to 10 per cent of AMD’s shares .

AI chips, known as graphics processing units (GPUs) , are specialized processors designed to handle the enormous calculations required to train and run AI systems. Unlike standard computer processors, GPUs can perform thousands of operations simultaneously , making them critical for powering AI models like chatbots, image generators, and other intelligent applications. Meta will use AMD’s latest MI450 chips , engineered specifically for high-performance AI workloads. The MI450 competes with Nvidia’s GPUs , which currently dominate the AI hardware market, offering high-speed processing for data-heavy AI tasks. Analysts say AMD’s MI450 may offer similar performance at scale, helping it catch up to Nvidia.

The agreement calls for a 6-gigawatt deployment , referring to the combined computational power of all chips purchased. The first 1-gigawatt shipment is expected in the second half of 2026, with subsequent shipments scaling to the full 6 gigawatts. Such massive computing power is essential for Meta’s AI data centres , which train advanced AI models, process huge volumes of user data, and support AI-driven features across Facebook, Instagram, and Meta’s broader ecosystem.

This deal runs alongside Meta’s long-term partnership with Nvidia , reflecting the company’s strategy to diversify AI chip suppliers while aggressively scaling its AI capabilities. Economically, it underscores the enormous investments tech giants are making in AI infrastructure, signaling a shift in the industry toward AI-driven growth . For AMD , it is an opportunity to challenge Nvidia’s dominance, while for Meta , the deal reinforces its commitment to AI as the core of future products and services .

Some experts caution that while the demand for AI chips is immense, the huge spending also raises questions about profitability and long-term returns , making this one of the most closely watched deals in the tech world.