AMD and Meta announce yet another circular megamoney GPU deal, this time for $60 billion of chips and potentially a 10% stake in AMD for Meta

AMD Instinct MI300 chip render. — (Image credit: AMD)

Keeping up with all the megabucks deals going on right now in AI land is pretty much a full-time job. But for what it's worth, here's another doozy that involves silly amounts of money and a whiff of just the sort of cannibalistic circularity that makes the whole situation so unnerving. AMD and Meta have announced a new strategic alliance in which Meta buys $60 billion worth of AMD GPUs, but also might end up owning 10% of AMD into the bargain, a stake currently valued at around $35 billion.

So, yeah, that's seemingly $60 billion being paid out by Meta, only to effectively get $35 billion back, along with a whole hill of GPUs for making AI slop. First up, however, it's worth noting that those dollar figures are estimates. The $60 billion is a Reuters estimate of the cost of what the official announcement explicitly mentions, namely 6 gigawatts worth of AMD Instinct GPUs for AI processing over a five-year period.

Asus Prime RX 9070 XT graphics card — Sir Not Appearing Anywhere Even Close To This Deal: An AMD GPU for, ya know, gaming not AI. (Image credit: Future)

The reason why AMD doesn't just give Meta the shares for free comes down to accounting practices and how shares are issued. The $1.6 million Meta would have to pay for the shares is largely incidental. The point is that if the conditions are met, Meta ends up owning about 10% of AMD in return for buying a bucket load of GPUs.

At this juncture, you might wonder why AMD doesn't just sell the GPUs to Meta more cheaply. Firstly, it makes AMD look less profitable. It would hurt things like AMD's profit margins and cash flow, which gets the megabucks bean counters at investment banks anxious, and set a real-world price precedent for AMD GPUs below that at which the company would like to sell them.

And in pure PR terms, this kind of deal has better optics than selling the GPUs off cheap to secure Meta as a customer. But that is, arguably, what AMD is doing.

Anywho, for we mere PC gamers, who knows what it all means. It's positive news for AMD, for sure, but at this stage, any notion of trickle-down economics in terms of AI riches translating into money being made available to invest in creating cool new gaming chips feels a bit hopeful if not downright fanciful.

For sure, we'd rather AMD was doing well than badly. But we'd also rather more of its money came from gaming than AI, as utterly unrealistic as that is.

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Jeremy has been writing about technology and PCs since the 90nm Netburst era (Google it!) and enjoys nothing more than a serious dissertation on the finer points of monitor input lag and overshoot followed by a forensic examination of advanced lithography. Or maybe he just likes machines that go “ping!” He also has a thing for tennis and cars.

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