Meta Platforms, owner of Facebook, will purchase artificial intelligence chips from Advanced Micro Devices (AMD) in a deal that includes the option to acquire up to a 10% stake in the chip company. This follows a recent partnership with Nvidia for AI data centers.

AMD’s latest chips, the MI450, will power Meta’s data centers with a 6-gigawatt agreement worth potentially over $100 billion. This move aims to compete with Nvidia in the AI sector, seen as a significant technological shift comparable to the launch of the first iPhone.

Nvidia’s early lead in GPU technology for AI systems like ChatGPT has spurred high demand for AI chips. Concerns arise over Meta’s substantial investments in AI and whether they will yield sufficient returns in the future amid intense competition from Google and OpenAI.

To bolster its AI capabilities, Meta recently made a $14.3 billion investment in AI data company Scale and acquired AI startup Manus. AMD issued Meta a warrant for up to 160 million shares, tied to performance milestones based on gigawatt shipments.

AMD’s stock surged over 9% with news of the deal. The first tranche of shares will vest with the initial 1-gigawatt deployment, with subsequent tranches linked to Meta’s purchase scaling to 6 gigawatts. The partnership signifies a strategic move by both companies to tap into the growing AI market.

Read more at Yahoo Finance: Facebook owner Meta to buy AI chips from AMD in deal worth up to $100 billion