Advanced Micro Devices Inc.'s (AMD) stock jumped as high as 15% in pre-market trading on Tuesday after Meta Platforms Inc. announced that it will infuse billions of dollars into buying AMD gear.
Meta and AMD announced a deal to scale their AI infrastructure and accelerate the development and deployment of cutting-edge AI models.
As of 8:10 a.m., EST, AMD futures were trading nearly 10% higher at $215.30.
Meta's stock traded 0.44% lower at $634.11 in pre-market trading.
“We are proud to expand our strategic partnership with Meta as they push the boundaries of AI at an unprecedented scale,” said AMD Chair and CEO Lisa Su.
“This multi-year, multi-generation collaboration across Instinct GPUs, EPYC CPUs and rack-scale AI systems aligns our roadmaps to deliver high-performance, energy-efficient infrastructure optimized for Meta's workloads, accelerating one of the industry's largest AI deployments and placing AMD at the center of the global AI buildout.”
The Mark Zuckerberg-owned company aims to deploy 6 gigawatts' worth of data center gear on the basis of AMD's processors. The deal win will boost the chipmaker's attempt to keep up with rival Nvidia Corp. Last week, bellwether Nvidia had announced its own deal with Meta.
Meta will receive warrants to buy 160 million AMD shares in stages, as part of the arrangement, bloomberg reported the two companies as saying. The company will become a major holder of AMD's shares after the stock price touches particular milestones.
Meta Founder and CEO Mark Zuckerberg said that they are excited to form a long-term partnership with AMD to deploy efficient inference compute and deliver personal superintelligence.
“This is an important step for Meta as we diversify our compute. I expect AMD to be an important partner for many years to come,” Zuckerberg added.
The agreement comes as the Facebook and Instagram owner amps up its infusion into artificial intelligence in to "aggressively front-load" computing capacity. As a result, CEO Mark Zuckerberg has made AI the company's top priority, pledging to devote hundreds of billions of dollars.
Last month, the executive announced a new initiative called Meta Compute which aims to secure a strategic advantage over competitors. The initiative will focus on building tens of gigawatts this decade and hundreds of gigawatts or more down the line.
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