Dear Reader,
Good morning.
This is Dylan Jovine with Behind the Markets.
Happy Thursday.
Today is Thursday, February 26th.
Today I want to talk about Meta's $100 billion deal with AMD — because this is not just a chip order.
It's a strategic move that could shift the balance of power in artificial intelligence for years to come.
Meta has agreed to purchase $100 billion worth of AMD's next-generation AI chips, specifically their upcoming MI450 series.
These are advanced GPU chips — the same class of chips that have become the backbone of modern AI systems.
And what's fascinating is how this entire revolution traces back to video game hardware.
Companies like NVIDIA and AMD originally built GPUs to render graphics for video games. But those same chips turned out to be uniquely suited for AI — capable of handling the massive parallel computations required to train and run large models.
Now they've become the most important hardware in the world.
Under the terms of the deal, Meta is committing enough computing capacity to support up to six gigawatts of AI infrastructure.
To put that into perspective, that's equivalent to multiple massive data centers operating at industrial scale.
Each gigawatt of AI infrastructure represents tens of billions of dollars in potential chip revenue.
But what makes this deal especially interesting is that AMD had to offer something unusual to secure it.
They granted Meta warrants — the right to purchase up to 10% of AMD's equity if certain price thresholds are met.
In other words, AMD is effectively turning Meta into a potential shareholder.
This tells you something important.
It tells you where the leverage is.
Right now, NVIDIA dominates the high-end AI chip market.
They've built a commanding lead in both performance and market share.
So for AMD to compete — to even secure major long-term contracts — they need to offer additional incentives.
They need to give customers a reason not to default to NVIDIA.
This is AMD's bet-the-company moment.
Their upcoming MI450 chip is designed to compete directly with NVIDIA's next-generation Rubin architecture.
Early indications suggest AMD's chip may be highly competitive — particularly in areas like memory architecture and rack-level efficiency.
But until it proves itself at scale, buyers still hold the upper hand.
And that brings us to Meta's strategy.
Meta isn't just buying chips.
They're buying leverage.
By committing to AMD, Meta ensures that NVIDIA does not become the sole supplier of advanced AI hardware.
Because if NVIDIA were the only option, they would control pricing.
And when one company controls pricing in a critical technology, costs tend to rise rapidly.
By supporting AMD as a viable competitor, Meta preserves competition.
They create a duopoly.
And duopolies behave very differently than monopolies.
This is classic game theory.
Each side is positioning itself for long-term advantage.
AMD needs Meta to validate its technology and establish credibility.
Meta needs AMD to ensure NVIDIA never becomes too powerful.
Both sides benefit — but the stakes are enormous.
Because whoever controls the AI hardware stack will control the foundation of the next generation of computing.
From my perspective, AMD remains a formidable competitor under Lisa Su's leadership.
She has already led one of the most impressive turnarounds in semiconductor history.
Now she's attempting something even more ambitious — breaking NVIDIA's dominance in AI.
If AMD succeeds, it could fundamentally reshape the competitive landscape.
If they fail, NVIDIA's position only becomes stronger.
Either way, this deal tells you one thing with certainty:
The AI infrastructure race is accelerating.
And not just in the semiconductor space.
We've spoken a lot now about how AI is jumping off the screen and into the physical world.
And one area where it's going to make the biggest impact is defense and security.
Yesterday - I just released a special report on a PRIVATE company, backed by the Department of Homeland Security that for a limited time only is accepting investments from the public.
But these deals close fast so make sure to get all the details NOW.
Anyway, that's what's on my mind today.
Have a wonderful day.
I'll see you tomorrow.
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