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AMD booked a USD 1.07 billion non-cash charge in its third quarter. The charge stems from stock warrants AMD issued to OpenAI and Meta as part of agreements tied to large chip purchases. The charge works out to 66 cents per share, and it covers the quarter that ended September 26.
Even with the charge, investors liked the results. AMD shares rose about 8% in late trading. The company also said it expects faster growth in 2027, driven by strong demand for data center chips.
AMD signed its deal with OpenAI in October 2025. In February 2026, it agreed to sell Meta up to USD 60 billion worth of AI chips over five years. Both companies got warrants, which let them buy AMD shares later. Meta's warrants could give it up to 10% of AMD, but only if certain conditions are met.
Those conditions include chip shipment targets and other business goals. Until then, the warrants stay out of reach. The charge is an accounting cost. AMD did not pay any cash.
Chief Financial Officer Jean Hu said the warrants will start to dilute shareholders once OpenAI and Meta meet the terms and use them. Dilution means more shares exist, so each existing share represents a smaller slice of the company. AMD plans to share more on the timing in 2027.
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AMD is not alone. Cerebras, Marvell, and Qualcomm have made similar deals with large tech customers. Chip firms are offering a piece of their own business to lock in big, long-term orders.
For the chipmaker, the risk is clear. If both companies use their warrants in full, current shareholders will own less of the company.The potential benefit is a long-term stream of large orders in a growing market.
The deals show that big AI players now see AMD as a real option beside NVIDIA. NVIDIA still leads the AI chip market by a wide margin. For now, AMD has traded some future ownership for a large order book, and investors seem happy with that choice.