AMD clinches second mega chip supply deal, this time with Meta

By Max A. Cherney and Stephen Nellis

SAN FRANCISCO, Feb 24 (Reuters) - Advanced Micro Devices said connected Tuesday it has agreed to merchantability up to $60 cardinal worthy of artificial intelligence chips to Meta Platforms implicit 5 years successful a woody that allows the Facebook ‌owner to acquisition arsenic overmuch arsenic 10% of the spot firm.

AMD shares roseate much than 10% successful premarket trading aft closing astatine $196.60 ‌in the erstwhile session.

The institution had signed a akin pact with OpenAI past year, which was hailed arsenic a ballot of assurance successful its chips and software, importantly boosting its banal ​price.

A caller slew of spot proviso agreements underscores immense appetite for processors from the AI industry. Meta has separately struck a woody with AMD's larger rival Nvidia to bargain millions of AI chips.

The concern underscores the deepening ties among immoderate of the AI industry's apical players amid rising concerns astir circular deals. Meta and OpenAI are acceptable to ain a involvement successful 1 of their astir important suppliers astatine a clip erstwhile rival chipmaker Nvidia is eyeing investments successful immoderate of its ‌largest customers, including the ChatGPT parent.

AMD volition proviso six ⁠gigawatts' worthy of chips to Meta, starting with 1 gigawatt of the company's forthcoming MI450 flagship hardware successful the 2nd fractional of this year, AMD CEO Lisa Su told a quality briefing.

Investor worries astir the AI marketplace besides widen ⁠to the agelong hold for important payoffs from Big Tech's relentless spending to grow information halfway infrastructure.

Capital expenditure from Alphabet, Microsoft, Amazon.com and Meta is expected to full astatine slightest $630 cardinal this year, according to Reuters calculations, with astir of the spending focused connected information centers and AI chips.

In summation to the AMD's flagship graphics chips, ​Meta ​also plans to bargain cardinal processors, including a variant that volition beryllium customized for ​the societal media platform's needs.

The customized CPU volition beryllium tuned ‌to present almighty show portion keeping vigor depletion arsenic debased arsenic possible, Su said. The woody volition see 2 generations of AMD's CPUs.

"So nary question Mark is very, precise ambitious successful what helium wants to accomplish, and we privation to usage each facet of our exertion to truly assistance Meta to execute that," Su said, referring to Meta CEO Mark Zuckerberg.

Meta helped lend to the MI450 plan that is optimized for a computing process known arsenic inference, which is erstwhile a chatbot specified arsenic OpenAI's ChatGPT responds to a user's queries.

Industry analysts expect the marketplace for inference hardware to dwarf the ‌size of the marketplace for the instrumentality needed to physique the ample models AI runs ​from.