Robbie Whelan

So in other words, Meta is agreeing to buy a ton of chips from AMD.

AMD is giving Meta

money in the form of stock warrants.

And it might feel sort of circular because it is.

But we're still in the stage of the AI boom right now where every one of these big deals is such a big headline and it's so exciting for investors that investors just bid up the stocks of the companies that are doing them.

Well, there's kind of like a conceptual cognitive dissonance here, which is that if truly there is insatiable demand for AI computing, one would think you wouldn't need to kind of pay these customers to incentivize them to buy your chips.

You would think they would just come to you and buy them with cash or with debt.

But a lot of the companies in this space are still, for better or for worse, startups, not public, doesn't have an investment grade credit rating.

It's not so easy for them to finance these deals themselves.

So they rely on their suppliers to help with the financing.

That's great for them.

But what it does on the other side of the equation is that it makes people look at these deals in a sort of circumspect way and think, well, if the demand there is not totally organic, then does that mean that we're in a bubble?

So every time one of these deals happens, the chip companies prosper and their stocks go up.

But it does kind of contribute to this broader sense in the market that maybe we're moving too fast, maybe we're in a bubble.

Six gigawatts is a ton of computing power.

I mean, we're talking about many, many football fields worth of data centers.

Just to sort of put it in context a little bit, Meta has committed to building out tens of gigawatts, 10, 20, or 30, something like that, this decade.

That's their entire program for building out AI infrastructure.

And so six gigawatts is a large chunk of that.

That's kind of their whole plan for the next four or five years.