Meta's $25 Billion Share Sale Drew Five Times the Demand, With Nvidia and AMD as Cornerstone Buyers

Meta has found a new kind of customer for its shares: the companies that sell it the chips. Meta has priced a $25 billion common stock sale, the first slice of a plan to raise about $98 billion for AI, and told investors that Nvidia and AMD intend to take $4 billion of it.

The offering priced at $625 a share, a 2.7 percent discount to Friday's close, and drew roughly five times as many orders as there were shares, Yahoo Finance reported on Tuesday. More than half went to long-term and existing holders. Meta's stock slipped as much as 1.4 percent to $621.47 in New York.

What did Nvidia and AMD agree to buy?

Meta says Nvidia plans to invest $3 billion and AMD $1 billion, according to SiliconANGLE. Broadcom is also part of the group, and together the three companies expressed interest in up to $5 billion. Those are non-binding indications, and the SEC filing says each could buy more, less or none.

The money comes with a bigger hardware relationship. Meta plans to use more of Nvidia's Rubin GPUs and Vera CPUs, buy more Spectrum-X Ethernet and BlueField-4 chips, and work with Nvidia on speeding up and cheapening its Muse family of language models and its consumer AI agent. With AMD, Meta has installed an initial batch of Helios racks, each holding 72 MI450 GPUs, and plans to adopt a custom accelerator based on AMD's Instinct design later.

Why does Meta need to sell this much stock?

The arithmetic is blunt. Yahoo reports that third-quarter capital spending was almost $34 billion while the business generated almost $33 billion, pushing free cash flow negative for the first time since 2012. A company filing says Meta needs to raise hundreds of billions of dollars over several years. We covered the quarter in an earlier report; the new element is how the gap will be paid for.