Meta has struck a multi-billion dollar chip deal with AMD that could lead to the Facebook owner taking a 10 percent stake in the group, sending shares in the US chipmaker surging on Tuesday. The social media giant said it would acquire customized chips with a total capacity of 6 gigawatts from AMD as it races to develop and deploy its AI models. AMD’s chief executive Lisa Su said that “each gigawatt of compute is worth double-digit billions” under the deal. AMD also issued Meta with a performance-based warrant, giving it the option to acquire up to 160 million AMD shares in tranches at an exercise price of $0.01, as the Facebook owner buys successive orders of processors. The shares-for-chips arrangement represents the latest “circular” transaction in the industry and mirrors a deal AMD struck with OpenAI in October, in which the ChatGPT maker was offered a 10 percent stake in the chip group over time. Shares in AMD, which has a market capitalization of $320 billion, surged 14 percent in pre-market trading on Tuesday. The transaction is also the latest sign that Big Tech customers are looking to diversify supply away from market leader Nvidia, which last week announced its own multiyear deal with Meta to supply it with “millions” of its chips over the coming years. Meta will receive its first tranche of AMD shares in the second half of this year when the first gigawatt of chips is shipped, Su said. The terms of the warrant are also tied to certain share price thresholds, escalating to $600 for the final tranche. The warrant expires in February 2031. “In some sense, Meta is taking a big bet on AMD, and we are also giving Meta a chance to participate if AMD shareholders do well,” Su said. “From a financial standpoint, each gigawatt of compute is worth double-digit billions.”