Meta Inks Multi-Billion AI Chip Deal with Google, after Nvidia and AMD Pacts

FomoAnxiety · 2026-02-27T04:21:08+00:00

Meta Platforms has signed a multi-billion-dollar deal with Alphabet to lease AI chips, following agreements with Nvidia and AMD. This investment reflects the competitive landscape of the AI chip market as companies ramp up expenditures to meet growing demand.

FomoAnxiety

2026-02-27 04:21:08

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Meta Platforms META +0.51% ▲ has signed a multi-billion-dollar deal with Alphabet GOOGL -1.76% ▼ for renting its artificial intelligence (AI) chips, after reaching similar deals with Nvidia NVDA -5.46% ▼ and Advanced Micro Devices AMD -3.41% ▼ . The social media giant will be leasing Google’s advanced TPUs (tensor processing units) to develop its new AI models, according to The Information.

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Moreover, Meta is discussing purchasing Google’s TPUs for its data centers as soon as next year. Alphabet has reportedly formed a joint venture with an undisclosed large investment firm to lease its TPUs to other customers.

The Chip War Is Escalating

Companies are spending billions into chips and infrastructure to meet the burgeoning AI demand, prompting chipmakers to rapidly innovate to win over cloud providers and enterprises hungry for scalable AI power.

Google also has been aggressively positioning its TPUs as a strong rival to Nvidia’s dominant GPUs (graphics processing units). With TPU sales now fueling Google’s cloud revenue growth, the company aims to show investors that its hefty AI investments are paying off.

According to the Meta-Nvidia deal, the Instagram-parent will deploy millions of Nvidia’s Blackwell and Rubin GPUs, Grace and Vera CPUs, and Spectrum-X networking to power large AI models. This marks Nvidia’s first major standalone Grace CPU rollout.

Moreover, Meta is investing in 6 gigawatts of AMD computing power, worth about $100 billion over five years, to build AI capabilities. The first custom MI450 GPUs and Venice CPUs arrive in late 2026, and Meta gets warrants for up to 160 million AMD shares to align their interests.

Is META Stock a Good Buy Right Now?

Analysts remain highly optimistic about Meta’s long-term prospects. On TipRanks, META has a Strong Buy consensus rating based on 39 Buys and four Hold ratings. The average Meta Platforms price target of $864.62 implies 31.6% upside potential from current levels.

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