Amd Stock Deal With Meta Could Top $100 Billion, but Warrants Raise Dilution Questions
Advanced Micro Devices' latest agreement with Meta Platforms has put amd stock squarely in the spotlight: the multiyear, multigeneration deal could be worth as much as $100 billion and includes a performance-based warrant that would let Meta buy up to 160 million shares of AMD common stock.
AI demand runs hot as companies race to scale
As the artificial intelligence revolution enters its fourth year, demand for AI-capable chips continues at a blistering pace, and AMD is pushing to capture more of that market even while Nvidia controls the biggest share of the data center GPU market. AMD said this week it will supply six gigawatts of custom Instinct MI450 GPUs to Meta as part of a major data center build-out.
Amd Stock: warrants and potential dilution
The Meta agreement comes with a performance-based warrant giving Meta the option to purchase up to 160 million shares; if exercised, Meta could own as much as 10% of AMD's outstanding stock. The warrants are good until 2031 and will not dilute existing shareholders until they are exercised, but AMD noted that if Meta and OpenAI both exercise their warrants it would dilute existing shareholders by 20%.
What the hardware commitment includes
Meta will deploy six gigawatts of MI450 GPUs and rack-scale Helios servers, and AMD said the MI450 chips and Helios servers are scheduled to begin shipping later this year. AMD described the arrangement as aligning roadmaps "across silicon, systems, and software to deliver AI platforms purpose-built for Meta's workloads. "
Past deal with OpenAI and the price tag on stock options
AMD struck a similar six-gigawatt deal with OpenAI late last year that included an option for OpenAI to buy up to 160 million shares at $0. 01 per share, a position that would represent a 10% stake if exercised. That earlier agreement and the Meta warrant together underpin investor scrutiny of deals that exchange hardware and deployment commitments for potential equity.
Meta’s broader data center push includes Nvidia tie-up
The Meta‑AMD agreement is not exclusive: it comes in the wake of a partnership revealed just last week in which Meta announced a multiyear, multigenerational relationship with Nvidia that will deploy Nvidia CPUs and "millions of Nvidia Blackwell and Rubin GPUs, " along with integration of Nvidia Spectrum-X Ethernet switches. Meta has framed these moves as part of a rapid hyperscale data center build-out optimized for both AI training and inference.
CEO comment and investor reaction framed by concrete timelines
AMD CEO Lisa Su called the structure of the Meta deal a "win-win" for shareholders, saying, "We're early in the cycle of seeing what the ultimate payoff can be... We have to invest ahead of the curve and really point in the direction that is going to have the largest benefit. " The inclusion of warrants that last until 2031, and the possibility of 20% dilution if two partners exercise their rights, has contributed to scrutiny from AI investors.
On one hand, the Meta deployment increases the likelihood of future MI450 chip sales; on the other, the warrants and equity options raise questions about how much AMD is trading away to secure hyperscale customers. That debate will play out as MI450 chips and Helios servers begin shipping later this year and as the performance conditions on the warrants are met or missed.
AMD has scheduled shipments of MI450 and Helios hardware for later this year, and the warrants tied to the Meta and OpenAI deals remain exercisable through 2031.
