Nvidia tightens its hold on Meta with a 'multigenerational' deal

"Meta is doubling down on its relationship with Nvidia in what the AI chip giant called a "multigenerational" deal. The agreement, announced Tuesday, calls for Meta to build data centers powered by millions of Nvidia's current and next-generation chips for AI training and inference. The move underscores how Meta is deepening its reliance on Nvidia, even as the social networking giant develops its own in-house chips and works with competing suppliers like AMD. Reports also suggested Meta has explored using TPUs - chips designed by its rival, Google."

"Crucially, the partnership will see Meta deploy not only Nvidia's GPUs, but also CPUs. CPUs, long dominated by Intel and AMD, are the central processors that work with GPUs inside data centers. They're used for general computing tasks and are core to essentially all modern computing systems, whereas GPUs are used in specialized cases that require more compute power, such as AI training and graphics in gaming.By supplying both, Nvidia stands to capture even more spend and deepen its role within Meta's AI stack."

"The Nvidia deal could cool speculation around Meta's purported TPU talks, said Patrick Moorhead, chief analyst at Moor Insights & Strategy - though Big Tech companies often test several suppliers at the same time. The deal arrives amid increased competition in AI infrastructure. While Nvidia leads the market, rivals including Google, AMD, and Broadcom are working to chip away at its dominance."

Meta agreed to a multigenerational deal with Nvidia to build data centers using millions of Nvidia's current and next-generation chips for AI training and inference. The partnership will deploy both Nvidia GPUs and CPUs, allowing Nvidia to capture a larger share of Meta's hardware spending and deepen its role in Meta's AI stack. Meta continues to develop in-house chips and engages other suppliers such as AMD and has explored Google-designed TPUs. Competition in AI infrastructure remains intense as rivals including Google, AMD, and Broadcom seek to challenge Nvidia's market leadership. Strong demand for AI infrastructure supports robust spending across multiple suppliers. Big Tech companies commonly evaluate multiple suppliers simultaneously, so supplier diversity likely continues despite the deepened Nvidia relationship.

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