Meta could end up owning 10% of AMD in new chip deal
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This isn't great news. I don't want a social media company having any say in the chip running my computer.
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Remember when people were scared the volume of EVs were going to take down the electric grid?
Yeah.
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Isn't this because, when building data centers, power is a more stable parameter than computing power? I imagine that between a project's go-ahead and its commissioning, the amount of computation one could get given a gigawatt would have increased by a significant but unpredictable amount.
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Great. Just don’t come crying for bailouts when these obscene mountains of funny money come crashing down around your sci-fi cultist ears.
Oh who am I kidding. The fuckers have already got their ‘too big to fail’ arguments lined up and ready.
Oh who am I kidding. The fuckers have already got their ‘too big to fail’ arguments lined up and ready.
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So does this mean that Meta has to pay 15% of their AMD profits to the US government? Or does Meta get their 10% and AMD has to give 15% (of China sales) to the orange dictator?
Either way, a quarter of a major computer chip company being owned by shifty billionaires is not pleasant.
Either way, a quarter of a major computer chip company being owned by shifty billionaires is not pleasant.
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Thank you! I knew I couldn't be the only one who remembered the good old days of (checks calendar) 2025 when we measured a computer chip's power by its ability to actually, you know, compute...
However, this does lay bare the essential problem with AI. We spend enough energy to power five million homes and what do we get in return? Something that tells us to use glue to hold the cheese on pizza and that insists there are only two "r"s in strawberry...
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But that was never an honest conversation. Neither is this one.
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Can someone smarter than me explain how Meta buying 10% of AMD equates to AMD selling 6GW of compute?
They're buying the stock and they get GPUs on top? Seems like a good deal for Meta.
They're buying the stock and they get GPUs on top? Seems like a good deal for Meta.
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We now measure CPUs in gigawatts?
Meta buying a share of AMD puts me off buying AMD in future....
Meta buying a share of AMD puts me off buying AMD in future....
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It is same as "spinning" - offering shares to obtain future business. Cost to AMD itself is zero, it is shareholders that are paying the bill by dilution of existing stock. But they are going to be happy too, until the line keeps going up.
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Pick your poison. Meta has it's hands in AMD and the US Government has it's hands in Intel.
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You know what there isn't a place for? Meta's AI services. No one will ever pay for it. They'll get some usage out of people generating reply images or instagram crap, but no one will ever pay them for anything. Good luck making back that investment, though historically that hasn't stopped Meta from dumping vast sums into obviously losing propositions (I believe horizon worlds earned a total of $470, for tens of billions invested).
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I am slightly confused as to the nature of this business deal. Meta is purchasing chips from AMD, and in return AMD is giving Meta shares of AMD. I was not aware that stock options were treated like the little plastic toy at the bottom of the cereal box.
I'm just saying, I've bought AMD chips before and somehow they never came with stock options, the selling point was "cheaper than Intel".
And it's not like Meta is low on operating cash, so I suppose my question is why AMD and nVidia are giving away equity to get companies to buy their chips?
I'm just saying, I've bought AMD chips before and somehow they never came with stock options, the selling point was "cheaper than Intel".
And it's not like Meta is low on operating cash, so I suppose my question is why AMD and nVidia are giving away equity to get companies to buy their chips?
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We can abstract a bit further. There are about 9 million people in London, so if you assume slightly more than 3 people per household the energy consumption of this deal is approximately two British Standard Londons.
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Is AMD a chip company or a stock price company nowadays?
I guess that the silver lining to PRC chip companies like CMXT moving into the consumer market is that they're geopolitically firewalled from Silicon Valley. There's actually a pretty funny history of Xi repeatedly snubbing Zuck's bootlicking attempts.
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Wait, that last thing I wrote seems really strange, because every news report I've seen has said that these chips are supposedly hard to find and companies are desperate to get their hands on them in sufficient quantity.
That's a market where Meta would be giving AMD shares in exchange for chips, not the other way around. Someone's playing games somewhere, and not the kind that use GPUs.
That's a market where Meta would be giving AMD shares in exchange for chips, not the other way around. Someone's playing games somewhere, and not the kind that use GPUs.
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MilanKraft
Ars Tribunus Angusticlavius
100%. But this morning I was reminded that the larger, more immediate problem is when companies like Meta become bigger players in the LLM shit-show, it has the potential to make the surveillance capitalism problem an order of magnitude worse. Wish the clueless television media would forget about ridiculous paperclip and evil robot scenarios — which basically serve the unintended purpose of hyping this bullcrap technology — and instead worry about the thing that is already starting to happen and will rapidly get worse.
https://proton.me/blog/ai-alignment-problem
In the end, everything Meta does in this space is going to be about turning people's private information and thoughts into a means of further manipulating them at scale, as voting blocks, consumers, and all the rest. Nobody will do more insidious things with this technology than Meta / Zuckerberg.
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Remember that time in the 90s when Bill Gates said, “15 Watts Ought to be Enough for Anyone.” /s
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Advertisers are paying for it. $30 global ARPU / year is an insane amount of perpetual cashflow.
META is an interesting player in the AI space because they aren't even trying to replace workers like most AI companies. They are literally just working on making social media more addictive and better targeting ads.
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At the risk of parroting previous answers, AMD compromising itself with Meta is not a smart move. They’re entangling themselves with a lot of… liabilities.
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It's all executive circle jerking to inflate stock prices and get their generational wealth and make the company's future someone else's problem.
One big game of soggy biscuit and taxpayers will end up having the big bites when we bail these fuckers out.
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Some of them have already made those arguments to lawmakers preemptively.
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Meta's revenues are ungodly large: $60bil or thereabouts. They expect to spend more than TWICE that this year. AND they're already borrowing money. AMD needs volume to compete, and Meta is a new customer whose business is a multiplier for their work.
They all believe it's a land rush and early adopters will be rewarded, even Apple, that has made their name coming in late. Maybe they're right?
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Here is my understanding of the deal:
1) Meta is to buy 6GW of GPUs from AMD. With 1GW = double digit billions (according to Dr. Su) that will be at least $60+ Billion going from Meta to AMD.
2) Over an unspecified amount of time, Meta will be allowed to buy up to 160 million shares of AMD at $0.01/share. With today's price around $200/share that will be worth about $32 billion.
Selling shares to Meta is giving Meta a possible claw back for some cash. Meta pays upfront for the chips and has a chance to some money back down the road based upon AMD stock performance. With the share buying price of $0.01/share that part of the deal will not be losing money for Meta. If AMD share price doubles ($400) then Meta's holdings will be up to $64 billion. Depending upon how much AMD charges for the 6GW of GPUs and if Meta ever divests itself of the AMD shares then Meta could make a net profit off of the entire deal.
Probable winner: AMD
Possible winner: Meta
Probable losers:
1) Discrete GPU consumers: This could negatively affect new product availability and pricing.
2) Current AMD shareholders as the stock pool will be diluted by the options and stock performance. Creating 160 million new shares is very roughly about 10% of existing shares.
Full disclosure: I own shares of AMD.
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That's the other strange thing... Microsoft's CEO has been on record saying they're sitting on warehouses of them, that they can't actually plug in and use because there's neither the infrastructure or power to turn them on...
So hard to find, yet unusable at the same time.
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I am not sure how much "say" Meta will have over hardware designs. This is a financial arrangement to give Meta a chance to claw back some of the up-front costs later down the road.
With that said, Meta will probably have prioritization for hardware production (as much as existing contracts will allow), and Meta may become the "preferred" AI partner for whatever AI AMD tries to shove into its software/products.
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