Advanced Micro Devices Inc. will sell artificial intelligence chips to Facebook owner Meta Platforms Inc. in a $100 billion deal that advances AMD’s position in the race for dominance in AI chipmaking.
It also gives Meta the opportunity to buy up to a 10% stake of AMD. The chipmaker’s shares jumped in pre-market trading.
AMD has a major presence in Central Texas, where it has operated since 1979. Though the company is based in Santa Clara, Calif., CEO Lisa Su runs the business from Austin, where it employs about 3,700 people and is growing with the recent announcement of a data center near Rockdale.
Under the deal, Meta will buy AMD’s latest chips, the MI450, to help power data centers. The 6-gigawatt agreement will see shipments supporting the first gigawatt deployment set to start during the second half of this year.
Shares of AMD were up more than 10% before the market open on Tuesday.
The companies said that AMD issued Meta a performance-based warrant for up to 160 million shares of its common stock at $0.01 a piece, structured to vest as long as certain milestones are achieved.
The first tranche vests with the initial 1-gigawatt of shipments, with additional tranches vesting as Meta’s purchases scale to 6 gigawatts.
Meta also has operations in Austin.
This is a developing story. Please check back for updates.