On Tuesday, Jim Cramer questioned why Advanced Micro Devices, Inc. (NASDAQ:AMD) structured its massive AI chip deal with Meta Platforms, Inc. (NASDAQ:META) to include equity warrants when Nvidia Corp (NASDAQ:NVDA) secured a similar business without giving up shares.
Cramer Questions AMD’s Meta Warrant Structure
During a CNBC interview, Cramer pressed Lisa Su on AMD’s decision to issue Meta performance-based warrants for up to 160 million shares — roughly 10% of the chipmaker — as part of a multiyear AI infrastructure agreement.
Cramer pointed out that Nvidia last week announced a major AI partnership with Meta without offering equity.
“Why is Meta taking a share in you?” he asked, noting that other suppliers have landed large contracts without similar concessions.
The AMD-Meta agreement centers on deploying up to 6 gigawatts of AI compute capacity powered by AMD’s Instinct GPUs. The warrants vest in stages as shipment milestones are achieved, with the final tranche tied to performance targets.
Lisa Su Calls Deal Transformational For AMD Shareholders
Su defended the structure, describing the partnership as a “win for AMD, a win for Meta and it’s a win for our shareholders.”
She said the AI accelerator market could reach $1 trillion over the next five years and argued that scale and co-optimization are critical.
“We are at a time in a place where the industry is moving so fast,” Su said, adding that it allows them to optimize hardware, software and systems together at a large scale.
Addressing skepticism that AMD may have needed to offer equity to secure the deal, Su said that the warrants are performance-based.
Every gigawatt of compute represents double-digit billions of revenue, she said, adding that the structure ensures mutual upside.
Meta, OpenAI Fuel Massive AI Deals With Corning And AMD
In January, Corning Incorporated (NYSE:GLW) announced a $6 billion deal with Meta aimed at expanding U.S. data center infrastructure to support artificial intelligence.
Meanwhile, in 2025, AMD signed a multiyear agreement with OpenAI that could reportedly generate up to $135 billion in revenue.
The deal calls for deploying 6 gigawatts of AMD GPUs to power OpenAI’s expanding data center infrastructure over the coming years.
In return, OpenAI could receive up to 160 million AMD shares, valued at roughly $75 billion, or about 10% of the company, through performance-based warrants that vest in stages. The final tranche would be triggered by the sixth gigawatt deployment and a $600 AMD share price.
Price Action: AMD shares jumped 8.77% during Tuesday’s regular session and added another 0.26% in after-hours trading, according to Benzinga Pro. Meta gained 0.32% during the regular session but declined 0.17% in after-hours trading.
AMD shows a strong long-term price trend but weaker performance in the short and medium term, along with a low value ranking, according to Benzinga’s Edge Stock Rankings.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Tada-Images / Shutterstock
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