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.
