Racing to Catch up With Nvidia, AMD Signs Chips-for-Stock Deal With Meta

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by Tripp Mickle and Adam Satariano

February 24, 2026

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AMD has entered into a multibillion-dollar deal with Meta, offering AI chips in exchange for a financial stake in the chip developer as part of its efforts to compete with Nvidia in the AI chip market. Under the agreement, Meta will purchase billions of dollars worth of AMD’s semiconductors to develop AI technologies and power new data centers. In return, Meta can acquire up to a 10% equity stake in AMD, mirroring a similar deal AMD reached with OpenAI earlier this year. This strategic move underscores AMD’s broader push to gain ground against Nvidia, which has dominated the lucrative AI chip market through significant investments in key customers like OpenAI and Elon Musk’s xAI. The Meta-AMD partnership reflects a growing trend among tech companies to tie their financial stakes directly to their AI hardware needs. By offering equity stakes in exchange for chip purchases, AMD is attempting to replicate Nvidia’s success in fostering long-term relationships with major AI players. This circular deal model has become a defining feature of the AI boom, where investments from large corporations like Microsoft, Google, and Amazon in AI-focused startups create self-reinforcing loops between hardware providers and software developers. For instance, these tech giants invest heavily in AI companies like OpenAI and Anthropic, which rely on Nvidia’s chips for their operations. However, this interconnected ecosystem has raised concerns among some Wall Street investors, who question whether the AI boom is becoming a bubble. The close ties between AI businesses and chip manufacturers create a challenging environment for assessing genuine demand for chips, data centers, and software. Critics argue that while these deals enable ambitious tech projects, they also risk creating an overreliance on a few major players, making it difficult to gauge the sustainability of the market. As AMD and others continue to push into AI chip manufacturing, the long-term implications of these strategic partnerships will likely shape the future of both the technology sector and the broader economy. Ultimately, this deal highlights the high stakes involved in the AI race, where access to capital is often tied directly to hardware investments. While such arrangements can drive innovation and growth, they also raise critical questions about market stability and competition. For readers interested in tech news

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Originally published on NYT Homepage on 2/24/2026