Meta just agreed to buy roughly $60 billion in AI chips from AMD and could take a 10 % stake in the company.
Meta’s decision to commit up to $60 billion to buy AI chips from AMD isn’t about spending randomly. It’s a strategic recalibration- one that secures Meta’s vision.
Meta has been in a tough spot as of today. The tech giant’s core businesses are still generating cash, but its overall growth has slowed. All of this while AI has become the foundational layer for future products and revenue streams.
In that context, computing capacity or the raw engine behind large language models and generative AI isn’t optional. It’s core infrastructure.
That’s where AMD comes in.
Meta is effectively securing fuel for its AI ambitions by locking in hardware supply over a long-term horizon. It isn’t about short-term bragging rights. It’s about avoiding bottlenecks. When AI models scale, access to chips becomes a competitive lever. Meta doesn’t want to be at the back of the queue for compute.
The weird twist in this deal?
The option for Meta to take up to a 10 % stake in AMD through performance-based warrants tells its own story. It signals that Meta is betting on volume, and on the long-term competitiveness of AMD’s silicon roadmap.
It boils down to aligning incentives with AMD’s future success.
Critics who label this a “bubble” miss the logic driving the decision.
The alternative for Meta wasn’t restraint. It was a potential irrelevance in an AI arms race. NVIDIA’s dominance in AI chips has created a chokepoint for many tech companies. Diversifying with AMD gives Meta leverage and choice.
It’s a huge spend. But it’s a calculated one-time expenditure, grounded in the reality that future AI products, from search to creators to commerce, will depend on having reliable, abundant compute power. Meta isn’t throwing money at a fad. It’s buying capacity before it becomes scarce.
Execution still matters, and chips alone won’t guarantee great AI products. But this deal is a logical step in Meta’s long game: control more of its own destiny rather than outsourcing its potential.
