Shares of NVIDIA Corporation (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) surged nearly 2% in the pre-market trading Friday following a bombshell announcement from Meta CEO Mark Zuckerberg. He revealed that his company is investing billions in NVIDIA’s cutting-edge AI chips.
Meta Platforms (NASDAQ: META) has announced a substantial investment, running into billions of dollars, in the renowned computer chips from NVIDIA.
Mark Zuckerberg, the CEO of Meta Platforms, disclosed this information in a recent Instagram Reels post. He underscored Meta’s commitment to building a “massive compute infrastructure” to support their future AI endeavors. The company plans to integrate 350,000 H100 graphics cards from NVIDIA into this infrastructure by 2024.
Zuckerberg didn’t disclose the exact number of graphics processing units (GPUs) the company has acquired. However, considering the limited availability of the H100 in the market since late 2022, analysts from Raymond James estimate that NVIDIA Corporation (NASDAQ: NVDA) is retailing the H100 for $25,000 to $30,000. On eBay, these GPUs can even surpass $40,000. If Meta were paying at the low end of the price range, it would amount to almost $9 billion in expenditures.
Moreover, Zuckerberg revealed that Meta’s overall compute infrastructure would include “almost 600k H100 equivalents of compute” when factoring in other GPUs. In December, tech giants like Meta, OpenAI, and Microsoft announced their adoption of the new Instinct MI300X AI computer chips from Advanced Micro Devices (NASDAQ: AMD).
The commitment to AI development is evident in Meta’s financial projections, as the company stated in its third-quarter earnings report that total expenses for 2024 are expected to range between $94 billion and $99 billion, with a significant portion allocated to computing expansion.
Zuckerberg said on the call with analysts,
“In terms of investment priorities, AI will be our biggest investment area in 2024, both in engineering and computer resources.”
NVDA stock surged nearly 2% in pre-market trading, reaching $580.73, while AMD stock experienced a 2% increase, reaching $165.95 in pre-market trading on Friday.
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