SAN FRANCISCO: Advanced Micro Devices (AMD) recorded a non-cash charge of approximately $1.1 billion in its third quarter. The charge relates to chip deals with OpenAI and Meta Platforms, the company said on Tuesday.
AMD issued warrants that give both customers the right to buy company shares after meeting specified conditions. The charge amounted to 66 cents per share for the quarter ended September 26.
Meta agreed in February to purchase up to $60 billion in artificial intelligence (AI) chips over five years. Under the agreement, Meta could acquire up to 10% of AMD if it meets the required milestones.
OpenAI secured a similar arrangement in 2025, giving it the option to acquire roughly 10% of the chipmaker. These agreements could dilute existing shareholders’ stakes if both customers exercise their warrants.
AMD Chief Financial Officer Jean Hu told analysts that dilution would depend on chip shipments and other commercial requirements.
The customers could purchase shares for as little as one cent each once they satisfy the conditions. Meanwhile, AMD shares climbed 8% in extended trading after the company forecast stronger-than-expected growth in 2027.
Read: OpenAI Partners with Broadcom to Develop Custom AI Chips
Rising demand for data-centre chips supported that outlook. Bob O’Donnell, chief analyst at TECHnalysis Research, said customers wanted a serious alternative to Nvidia.
He argued that AMD’s improving price-to-performance helped attract orders, although financial incentives also played a role.
Read: AMD Personal Supercomputer; Local AI Workstation; Instinct MI350P.
Analysts welcomed the agreements as evidence of demand for AMD products. However, they did not expect the deals to displace Nvidia’s market leadership.
AMD has also reached a chip-purchase agreement with Anthropic that includes an investment commitment. Hu said the company expects to provide further guidance in 2027 on when customers could meet the warrant conditions.
With additional input from Reuters
