AMD strikes massive AI chip deal with Meta

Meta and AMD have announced the deal whereby the social media giant would purchase up to 6 gigawatts worth of CPUs and GPUs from AMD. The first GW worth of chips is set for delivery to Meta in the second half of this year and consists of a custom version of AMD’s Instinct MI450 GPU accelerators and 6th Generation AMD Epyc CPUs, codenamed “Venice” and “Verano,” so Meta is serving as the launch customer for both chips. Venice and Verano use the Zen 6 CPU core design, a ground-up new architecture optimized for data-center throughput and HPC workloads. AMD claims up to 70 % higher performance over the previous generation of Epyc under certain workloads. Zen 6 comes in two designs: Standard Zen 6 with up to 96 cores / 192 threads in high-end configurations using 12-core chiplets and Zen 6c dense cores, which have fewer features but are smaller, supporting up to 256 cores / 512 threads. It is expected to more than double per-socket memory bandwidth compared to 5th-Gen Epyc to around 1.6 TB/s. The new chips will run AMD’s ROCm software and built on the AMD Helios rack-scale architecture. AMD and Meta jointly developed Helios through the Open Compute Project to enable scalable, rack-level AI infrastructure. No dollar figures were disclosed, but according to the Wall Street Journal, the deal is worth more than $100 billion, with each gigawatt of compute alone worth tens of billions in revenue for AMD. The funding is also unique. Instead of a cash purchase, AMD has reportedly given Meta warrants to buy up to 160 million shares at $0.01 each. Stock warrants are financial instruments that give you the right (but not the obligation) to buy a company’s stock at a fixed price before a certain expiration date, according to the vendors. With 1.6 billion shares outstanding, Meta is poised to acquire 10% of AMD. But perhaps not. These shares vest only as Meta buys more computing capacity. The final tranche vests only if AMD’s stock price hits $600, according to a recent 8K filing. AMD shares are currently valued at just over $200 as of this writing. The deal is identical to the one AMD struck with OpenAI last October. That deal was also for 6 GW worth of GPUs and included a warrant for up to 160 million AMD common stock shares structured to payout once certain targets were met. Meta is not playing favorites. Last week it announced that it will also deploy standalone Nvidia Grace CPUs in its production data centers, citing greatly improved performance-per-watt. That doesn’t come as a surprise to Gaurav Gupta, vice president analyst at Gartner, who says we are compute constrained and Hyperscalers or frontier model companies will use a multisource approach to get access to compute. “No one wants to be stuck with a single vendor. Diversify and then different workloads have different compute needs.,” he said.