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Advanced Micro Devices (AMD) is surging after announcing a landmark multi-year agreement to deploy up to 6 gigawatts of custom MI450/Helios AI systems with Meta Platforms (META), a deal estimated at $60–$100 bln over five years. The partnership represents one of the largest AI infrastructure wins in AMD’s history and significantly deepens its footprint within hyperscale data centers. Investors are focusing on the scale, long duration, and strategic implications of the agreement, though the structure -- including substantial warrant issuance -- introduces important dilution and margin considerations.

• AMD issued META performance-based warrants for up to 160 mln shares (roughly 10% of shares outstanding), vesting in tranches as shipment milestones are met and as AMD stock reaches price targets reportedly as high as $600 per share.
• The dilution is significant, raising the key question of whether the contract includes firm “take-or-pay” commitments that justify issuing equity in exchange for guaranteed multi-year demand.
• Shipments for the initial 1-gigawatt deployment are expected to begin in 2H26, implying a meaningful revenue ramp starting late next year.
• The systems will feature Instinct MI450 GPUs and 6th Gen EPYC “Venice” CPUs integrated into AMD’s Helios rack-scale architecture, co-developed via the Open Compute Project.
• The deal includes deep co-engineering across silicon, systems, and software to optimize META’s AI workloads, including Llama 4 and Llama 5 models.
• Strategically, the agreement likely captures a larger share of META’s future “compute mix,” though it is unclear whether this meaningfully displaces NVIDIA (NVDA) or is primarily additive to support META’s aggressive AI scaling plans.
• Investors will also scrutinize gross margins. If AMD offered steep pricing concessions to secure anchor status, it could pressure long-term pricing power with other cloud service providers.

Briefing.com Analyst Insight

This agreement materially elevates AMD’s AI credibility, transforming it from a challenger into a core partner for one of the world’s largest AI spenders. The sheer scale - potentially approaching $100 bln - suggests AMD is securing long-duration visibility and validation for its MI450/Helios roadmap. However, issuing warrants equivalent to roughly 10% dilution is a substantial tradeoff, and investors will want clarity on contractual guarantees and pricing structure. The key strategic question is whether this win meaningfully displaces NVDA within META or simply reflects incremental AI capacity. If AMD captures incremental share of META’s future AI capex, it strengthens competitive positioning across hyperscalers. But if pricing concessions were aggressive, AMD risks compressing margins in exchange for volume. Ultimately, the deal underscores AMD’s emergence as a legitimate second source in AI infrastructure, with the balance between scale and profitability now the central debate.