Chip Deals Turn the AI Race into a Share Swap Game

AMD’s New Play: Turning Chip Sales into Equity Stakes

Advanced Micro Devices (AMD) is reshaping its strategy in the AI chip arena. Rather than merely selling hardware, the company now lets customers acquire a slice of AMD when they purchase its processors.

• Meta Deal: The social‑media giant will buy billions of AMD chips for new data centers and can acquire up to a 10 % stake in the chipmaker.
• Earlier Agreement: AMD also struck a similar arrangement with OpenAI this year.

These circular deals are becoming standard in the AI boom. Nvidia, for instance, invests heavily in its clients—OpenAI, Elon Musk’s xAI, CoreWeave—who then buy Nvidia chips. Likewise, Microsoft, Google, and Amazon pour billions into AI firms that depend on Nvidia for computing power.

Investors view this loop with caution. The blurring of supply and demand lines makes it hard to pinpoint where growth originates. Some analysts argue that only the largest tech firms can afford such expensive AI projects, betting on eventual dominance. If demand falters, these investments risk stalling.

The AMD‑Meta partnership illustrates how chip makers use equity deals to lock in sizable orders and deepen ties with key AI developers, underscoring the growing interdependence between hardware suppliers and software innovators in a fast‑evolving market.