CONNECT WITH US
AI & Deeptech

AI & Deeptech

AMD's OpenAI, Meta chip deals trigger $1 billion quarterly charge

IndiaTimes (ET) - AI logo

Published on

Add as a preferred source on Google
AMD's OpenAI, Meta chip deals trigger $1 billion quarterly charge

Business News Tech AI AMD's OpenAI, Meta chip deals trigger $1 billion quarterly charge

AMD in February agreed to sell up to $60 billion worth of AI chips to Meta over five years, giving the Facebook owner warrants that could let it buy as much as 10% of the chip firm if it meets certain milestones. The deal followed a similar agreement with OpenAI last year, giving the startup the option to buy up to roughly 10% of the chipmaker.

Advanced Micro Devices' strategy of offering stakes in its future success to major AI customers OpenAI and Meta Platforms in exchange for big chip commitments is beginning to leave a sizeable imprint on its profits. AMD in February agreed to sell up to $60 billion worth of AI chips to Meta over five years, giving the Facebook owner warrants that could let it buy as much as 10% of the chip firm if it meets certain milestones. The deal followed a similar agreement with OpenAI last year, giving the startup the option to buy up to roughly 10% of the chipmaker. On Tuesday, AMD said it recorded a $1.07 billion non-cash charge, or 66 cents a share, in the third quarter ended September 26 to account for these warrants, as shipments under the agreements begin to ramp up.

The chipmaker forecast faster-than-expected 2027 growth thanks to surging data-center sales, sending its ‌shares up 8% in extended trading and pushing up stocks of Intel, Nvidia and Broadcom. The warrants are part of a growing use of equity incentives by chip and AI cloud companies to secure massive, long-term purchases from a small group of AI customers, and highlight the circular nature of the AI boom, where companies can simultaneously be customers, suppliers and investors in one another.


Source link
Related Topics:AI & Deeptech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.