The influencer economy is based on the idea that if someone of status does a thing — a Kim Kardashian or a Hailey Bieber, say — others will flock to do it too. This seems to apply quite well to clothes, gadgets, make-up and hairstyles. But does it work with microchips? AMD is making a bet, potentially paid for in its own shares, that it does.
The chipmaker signed a deal with Facebook owner Meta Platforms on Monday that’s very like one it inked with OpenAI in October. AMD will sell its Instinct chips to Meta, furnishing data centres that use power equivalent to 6 gigawatts. To mark this as a “strategic partnership” rather than just — heaven forbid — a financial transaction, AMD is also giving Meta warrants that could convert into a 10 per cent stake in the company.
Getting much more business out of Mark Zuckerberg is clearly worth something to AMD. But how much, exactly? AI chip supremo Nvidia says it makes about $35bn per gigawatt supplying data centres; assume AMD, as the market’s second fiddle, makes $25bn. That’s $150bn of revenue over time. After expenses and tax, the Meta deal might bring $45bn of total earnings. In today’s money, that’s probably close to the $30bn increase in AMD’s market capitalisation after the tie-up was announced.