Shares of Advanced Micro Devices Inc. surged as much as 14% in pre-market trading Tuesday after the chipmaker announced a landmark multi-year partnership with Meta Platforms Inc. to supply up to 6 gigawatts of AMD Instinct GPUs for the social media giant's next-generation AI infrastructure.

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The deal, valued at more than $100 billion over five years according to market estimates, marks one of the largest single commitments in the AI accelerator market and positions AMD as a key tier-1 supplier alongside dominant player Nvidia. AMD and Meta revealed the agreement in coordinated press releases early Tuesday, February 24, 2026, sending AMD stock sharply higher while Meta shares traded mixed.

Under the definitive agreement, Meta will deploy AMD Instinct GPUs across multiple generations, starting with a custom variant based on the MI450 architecture optimized for Meta's workloads. Shipments for the first gigawatt are expected to begin in the second half of 2026, powered by the AMD Helios rack-scale architecture — originally announced at the 2025 Open Compute Project Global Summit — and paired with sixth-generation AMD EPYC "Venice" CPUs running ROCm software.

The partnership expands on existing collaboration between the companies, aligning silicon, systems and software roadmaps to accelerate AI model development and deployment. AMD will issue Meta a performance-based warrant for up to 160 million shares of common stock, vesting in tranches tied to stock price milestones and technical/commercial achievements. If fully vested, this could give Meta ownership of roughly 10% of AMD, deepening the strategic tie.

Analysts hailed the deal as a major validation for AMD's AI ambitions. "This is a game-changer," said one semiconductor expert, noting it provides near-term revenue visibility and credibility in hyperscaler contracts. The agreement follows Meta's recent expansion with Nvidia, where the company committed to deploying millions of Blackwell and upcoming Rubin GPUs. Meta's dual-sourcing strategy underscores its massive AI buildout needs while fostering competition in the GPU market.

AMD shares jumped from around $180 to over $205 in pre-market action, adding billions to the company's market cap and reflecting investor enthusiasm for AMD's growing role in the AI boom. The stock has risen more than 80% over the past year amid strong demand for Instinct accelerators, though it remains below some fair-value estimates amid broader sector volatility.

Meta's AI push continues at a rapid pace. The company has poured tens of billions into data center infrastructure to support advanced models like Llama and future generative AI features across Facebook, Instagram and WhatsApp. The AMD deal secures long-term capacity while diversifying suppliers beyond Nvidia, potentially easing pricing pressure and supply constraints.

For AMD, the partnership bolsters its challenge to Nvidia's dominance in AI training and inference. The Instinct MI300 series has gained traction with hyperscalers, and the custom MI450-based GPU promises tailored performance for Meta's scale. AMD CEO Lisa Su has emphasized ecosystem collaboration, with ROCm software stack improvements and open standards helping close the gap with Nvidia's CUDA platform.

Market reaction was swift. Pre-market volume spiked, with AMD leading gainers among major tech names. Broader semiconductor indexes rose modestly, buoyed by optimism in AI infrastructure spending. However, some analysts cautioned that execution risks remain, including delivery timelines, competition from Nvidia's Blackwell ramp and potential macroeconomic headwinds.

The deal arrives amid intense scrutiny of AI capex. Meta's aggressive spending has drawn questions about ROI, but CEO Mark Zuckerberg has defended the investments as essential for long-term competitiveness. AMD's inclusion in Meta's roadmap signals confidence in its ability to deliver at hyperscale levels.

Investors will watch closely for updates on deployment milestones, first shipments in late 2026 and any impact on AMD's quarterly guidance. The partnership could add tens of billions in cumulative revenue over the multi-year term, providing a strong tailwind for AMD's data center segment.

As the AI arms race intensifies, deals like this highlight the high stakes for chipmakers. AMD's surge underscores market belief in its potential to capture meaningful share from Nvidia, even as the sector remains highly competitive.