Shares of Advanced Micro Devices Inc. rose 8% today after it announced plans to supply Meta Platforms Inc. with billions of dollars worth of chips.

The Facebook parent will also receive the option to buy an up to 10% stake in AMD. As part of the deal, Meta has received a stock warrant that will allow it to purchase as many as 160 million of the chipmaker’s shares for a penny apiece. Those shares will vest only if the companies’ collaboration reaches certain performance milestones.

Meta plans to buy a customized version of an upcoming graphics card called the MI450. Last year, AMD disclosed that the accelerator is based on Taiwan Semiconductor Manufacturing Co.’s two-nanometer process. Each MI450 ships with 432 gigabytes of high-speed HBM4 memory that can move 19.6 terabits of data per second to and from the processor’s logic circuits.

Meta plans to install the chips in racks based on a new design called Helios. The architecture, which the company developed in collaboration with AMD, features liquid cooling and a so-called double-wide layout designed to ease maintenance. Each Helios rack can hold up to 72 MI450 accelerators.

Meta’s chip deal with AMD will also see it adopt two upcoming central processing units codenamed Venice and Verano. The former CPU, which is set to launch first, is based on TSMC’s two-nanometer node. It will include workload-specific optimizations designed to boost power efficiency.

AMD will begin shipping the chips to Meta in the second half of the year. The first batch of shares that Meta is set to receive will vest once the Facebook parent takes delivery of 1 gigawatt worth of chips. A gigawatt corresponds to the power usage of several hundred thousand homes.

In the long term, Meta intends to purchase up to 6 gigawatts’ worth of hardware from AMD. The final batch of shares will vest if all the planned orders materialize and the chipmaker’s stock price tops $600. The Wall Street Journal reported that the deal’s total value could top $100 billion.

“We expect this partnership to drive substantial multi-year revenue growth and be accretive to our non-GAAP earnings per share, marking another significant step forward in delivering on our ambitious long-term financial model,” said AMD Chief Financial Officer Jean Hu.

The deal comes four months after the chipmaker inked a similar contract with OpenAI Group PBC. Like Meta, the ChatGPT developer plans to purchase up to 6 gigawatts’ worth of AI processors and will receive a stock warrant for 160 million shares. OpenAI’s semiconductor procurement strategy also encompasses other suppliers, notably Nvidia Corp., as well as custom chips that it developed in collaboration with Broadcom Inc.

Meta is also partnering with multiple suppliers to support its data center buildout. Last Tuesday, the company inked a deal to buy millions of Blackwell and Rubin graphics cards from Nvidia. The Facebook parent expects to incur up to $135 billion in capital expenses this year, a more than 70% increase over 2025.

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