Meta Platforms (META) has signed a multi-year agreement with Amazon (AMZN) to adopt Amazon Web Services’ (AWS) Graviton5 central processing unit chips across its infrastructure. The deal, reported on Friday, is expected to be worth billions of dollars and marks a major step in Meta’s effort to expand computing power for artificial intelligence (AI). It also strengthens Amazon’s position in a growing market for AI-related chips.
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Trade AMZN with leverageMeta Secures Multi-Year Supply Deal for AWS Chips
The new agreement between Meta and Amazon comes as major technology companies race to secure more hardware to support surging AI demand. Under the deal, Meta will use tens of millions of cores powered by Graviton5 chips. Each chip contains 192 cores that can handle different tasks across large computing systems.
The partnership also highlights Amazon Web Services’ growing push into custom chip development. The Graviton line is now in its fifth generation since launching in 2018, with production handled by Taiwan Semiconductor Manufacturing Co. (TSM).
According to AWS executive Nafea Bshara, the agreement will run for many years and involve spending billions of dollars, underscoring the scale of Meta’s investment in AI infrastructure. He added that AWS has positioned its Graviton chips as a lower-cost option for cloud computing, with savings from Amazon’s in-house chip design passed on to customers.
Amazon and Meta Reshape CPU Demand as Competition Intensifies
The agreement adds to Meta’s growing network of chip partnerships. The company has already signed major deals with Nvidia (NVDA) and Advanced Micro Devices (AMD), while also working with Arm Holdings (ARM) on newer processor designs. With the AWS partnership, Meta is broadening the sources behind its AI infrastructure.
Santosh Janardhan, Meta’s head of infrastructure, said diversifying compute sources has become a strategic priority as the company scales its AI ambitions. His comments point to a wider industry trend as companies seek more than one supplier to meet growing demand.
At the same time, competition in AI infrastructure is intensifying across cloud providers and semiconductor firms. As more workloads move from training to deployment, demand for CPUs is drawing renewed attention. Many firms are now investing in CPUs to run those systems after deployment, even as graphics chips remain key for training models. As a result, this shift has contributed to rising demand for CPUs, with Intel (INTC) noting this week that prices have already increased significantly.
Is Meta a Good Stock to Buy Now?
Wall Street analysts tracked on TipRanks have rated Meta Platforms (META) a Strong Buy, underscoring positive sentiment in the AI stock. The stock currently trades around $655 with an average price target of $825 and a 28% upside potential. Moreover, among 46 analysts, 40 recommend Buy, 6 Hold, and 0 Sell. For more information on META’s performance data, price targets, and analysts’ sentiments, visit TipRanks’ Stocks Comparison Center.
