Advanced Micro Devices (AMD) has recorded a $1.07 billion non-cash charge in its third-quarter results, reflecting the financial impact of major artificial intelligence chip agreements with OpenAI and Meta Platforms.
The charge, equivalent to 66 cents per share, relates to stock warrants issued to both technology companies as part of long-term agreements to secure substantial purchases of AMD’s AI processors.
Under the agreement announced in February, Meta committed to purchasing up to $60 billion worth of AMD chips over five years. The deal includes warrants that could allow Meta to acquire up to 10% of AMD if certain commercial milestones are achieved.
AMD previously reached a similar agreement with OpenAI, giving the artificial intelligence company an option to acquire approximately 10% of the chipmaker through performance-based stock warrants.
The financial arrangements are designed to encourage long-term customer commitments as AMD seeks to expand its presence in the rapidly growing AI semiconductor market.
However, the deals also carry potential risks for existing shareholders. If the warrants vest and are exercised, OpenAI and Meta could acquire significant stakes in AMD, increasing the company’s outstanding shares and diluting existing ownership.
AMD’s finance chief, Jean Hu, said the warrants would begin affecting shareholder ownership once the required vesting and exercise conditions are satisfied. The company expects to provide further guidance on the process in 2027.
Despite the charge, AMD delivered an encouraging outlook for its business, forecasting stronger-than-expected growth in 2027 as demand for data centre processors and AI infrastructure accelerates. Its shares rose approximately 8% in extended trading following the announcement.
Industry analysts view the partnerships as a sign of growing confidence in AMD’s AI technology, although they do not necessarily threaten Nvidia’s dominant position in the market.
The development also reflects a broader trend in the technology industry, where semiconductor manufacturers are increasingly using equity incentives to secure major chip-purchasing commitments from leading AI companies.
As competition for AI infrastructure intensifies, AMD’s ability to convert these agreements into sustained revenue growth will be closely watched by investors.
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