AMD took a $1.07 billion non-cash charge for chip-deal warrants issued to OpenAI and Meta in its quarter ended 26 September, equivalent to 66 cents per share, Reuters reported. AMD disclosed the charge with its results on 3 November as shipments under the agreements began to ramp up. The warrants give the two customers rights to buy stakes in the chipmaker if they meet specified conditions.
Key points
- AMD took a $1.07 billion non-cash charge, equal to 66 cents a share, for warrants issued to OpenAI and Meta.
- Meta’s agreement covers up to $60 billion in AI chips over five years and carries a potential stake of as much as 10 per cent.
- OpenAI has an option to buy up to roughly 10 per cent of AMD, subject in part to AMD share-price thresholds.
- AMD finance chief Jean Hu said the warrants would dilute shareholders once the customers meet vesting and exercise conditions.
Meta’s $60 billion chip agreement
AMD agreed in February 2026 to sell Meta up to $60 billion of AI chips over five years. As part of that arrangement, Meta received warrants that could allow it to buy as much as 10 per cent of AMD if it meets certain milestones. A similar agreement struck with OpenAI in 2025 gave the AI company an option to buy up to roughly 10 per cent of the chipmaker.
Those potential stakes are tied to purchases rather than an immediate transfer of shares. The structure gives AMD long-term chip commitments from two major customers while giving those customers an interest in its future share value. The $1.07 billion charge is non-cash, but it enters AMD’s quarterly results as deliveries under the agreements begin to increase.
The two warrants differ in one provision: OpenAI’s includes thresholds for AMD’s share price, while Meta’s does not. Both agreements have conditions that must be met before the warrants can be exercised. The potential size of each stake makes those conditions consequential for existing AMD shareholders as well as for the customers receiving the warrants.
Jean Hu sets out the dilution conditions
Jean Hu, AMD’s finance chief, told analysts on 3 November that the warrants would begin diluting shareholders once OpenAI and Meta satisfy their vesting and exercise conditions. Those include shipments and other commercial requirements. The value of the warrants when exercised will also depend on AMD’s share price at that time.
Reuters reported that OpenAI and Meta could each acquire a large AMD stake for as little as a penny if their warrants fully vest and are exercised. That outcome could substantially increase AMD’s share count. The quarterly charge is already in AMD’s results, while dilution depends on the customers meeting the warrant conditions.
AMD has also arranged a chip purchase deal with OpenAI rival Anthropic. That agreement includes a commitment by AMD to invest in Anthropic, a different financial provision from the warrants granted to OpenAI and Meta.
Cerebras and Marvell offer other warrant deals
Other chip suppliers have offered customers rights to buy equity alongside purchase commitments. Cerebras, a chip startup, granted OpenAI warrants against a $20 billion commitment. Marvell issued warrants to Alphabet’s Google that could give it the right to buy a stake worth a potential $12.2 billion. Qualcomm also granted Amazon warrants in a $60 billion agreement for AI data-centre chips.
Analysts told Reuters that AMD’s deals signalled demand for its chips and software, while saying the arrangements were unlikely to displace Nvidia’s leading position. Bob O’Donnell, chief analyst at TECHnalysis Research, said incentives had played a part in sales, alongside demand for an alternative to Nvidia. His assessment put the warrants beside AMD’s ability to compete on chip price and performance.
AMD forecast faster-than-expected growth in 2027 on rising data-centre sales, and its shares gained 8 per cent in extended trading. The outlook followed AMD’s fourth-quarter sales forecast of $17 billion, ahead of estimates. AMD expects to provide further guidance in 2027 on when the warrants’ vesting and exercise conditions could be met, Hu said on the analyst call.
