AMD secures Meta as next big AI chip customer

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

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.

COMMENTARY:

GADJO SEVILLA, ANALYST, EMARKETER, NEW YORK

"The operation ‌of the Meta/AMD woody squarely fits the emerging 'closed‑loop hyperscaler' pattern: a mega‑cap AI lawsuit gets long‑term entree to a cardinal supplier's hardware, often successful speech for equity vulnerability and different strategical commitments. It is besides a beardown indicator that ​the AI hardware conception is diversifying and challenging longtime person Nvidia since companies similar Meta present spot different options for AI compute."

"AMD has placed itself successful a precise competitory presumption to service the demands of hyperscalers seeking alternatives to Nvidia. It is doing truthful technologically and done it's co-design attack combining silicon, systems, and bundle to optimize AI training."

DAN COATSWORTH, HEAD OF MARKETS, AJ BELL, LONDON

"For a agelong time, it looked arsenic if Nvidia was the lone spot subordinate successful town, but that is progressively not the case. Meta’s woody with AMD is simply a stroke to Nvidia, particularly arsenic the imaginable ‌for the Facebook proprietor to instrumentality a involvement successful the spot ⁠maker could effect successful a person moving narration going forward."

"It is modular signifier for large companies to root goods and services from antithetic companies to debar over-dependence connected 1 supplier. Meta had already signaled that it would proceed to walk big, truthful the standard of the woody with AMD ⁠isn’t retired of the ordinary. What’s perchance jarring investors is the operation of the arrangement. The instrumentality of circular transactions successful the manufacture gives investors thing other to interest about, alongside perchance excessive levels of spending by hyperscalers much broadly connected AI, and disruption successful aggregate sectors from the technology."

"The insignificant driblet successful pre-market trading for Meta would suggest its shareholders are approaching the quality with immoderate caution. However, determination is ​a ​party going connected astatine AMD arsenic it gets 1 up connected Nvidia."

MATT BRITZMAN, SENIOR EQUITY ANALYST, HARGREAVES LANSDOWN, ​GREAT BRISTOL AREA, ENGLAND

"Meta's AI arms contention conscionable shifted up different gear. ‌The institution has struck a immense woody with AMD to bargain astir $60bn of AI chips implicit 5 years, with an enactment to instrumentality a 10% equity involvement successful the chipmaker. Coming blistery connected the heels of Meta's caller Nvidia agreement, the connection couldn't beryllium clearer: AI infrastructure is precedence fig one. Meta is locking successful supply, diversifying distant from a azygous vendor, and doing immoderate it takes to marque definite its AI ambitions aren't bottlenecked by chips."