AMD's OpenAI, Meta chip deals trigger $1 billion quarterly charge
AMD incurred a substantial accounting charge tied to equity warrants issued to OpenAI and Meta in connection with large AI chip supply agreements. In February, AMD agreed to sell Meta up to $60 billion worth of AI chips over five years, with warrants allowing Meta to acquire up to 10% ownership if performance milestones are met. A similar prior agreement with OpenAI grants the startup comparable warrant rights. The $1 billion charge reflects the accounting valuation of these dilutive equity instruments.
Key points
- AMD took $1 billion quarterly charge for warrants from OpenAI and Meta AI chip deals
- Meta deal: up to $60 billion in chips over five years with potential 10% ownership warrant
- OpenAI holds similar warrant agreement for up to 10% ownership pending milestones
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