On Thursday, a top tech analyst said Meta Platforms, Inc.’s (NASDAQ:META) massive AI infrastructure investment underscores its long-term ambitions, arguing the company’s custom chip strategy is designed to expand computing capacity alongside Nvidia Corp (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD) —not replace them.
Meta Isn’t ‘Replacing Nvidia And AMD,’ Says Daniel Newman
Reacting to a Reuters report, Futurum Group CEO Daniel Newman said investors should not mistake Meta’s growing in-house chip ambitions for a move away from its longtime semiconductor partners.
"$META won’t be the first to blink on Capex. $145 Billion this year while expanding in-house infrastructure capabilities," Newman wrote on X.
He added, "But to be clear, it isn’t replacing AMD and NVDA with in-house, it is augmenting to meet ambitious capacity requirements and demand expectations."
Newman’s comments suggest Meta’s custom silicon strategy is aimed at supplementing, rather than displacing, the massive volumes of AI GPUs it continues to buy from Nvidia and AMD.
Meta To Begin Manufacturing Iris AI Chip In September: Report
Earlier in the day, Reuters, citing an internal company memo, reported that Meta plans to begin manufacturing its in-house AI chip, code-named Iris, in September as part of a broader push to strengthen its AI infrastructure.
The report said Iris is part of Meta’s four-generation Meta Training and Inference Accelerator (MTIA) program.
The chip was developed with Broadcom, Inc. (NASDAQ:AVGO) and will be manufactured by Taiwan Semiconductor Manufacturing Co. (NYSE:TSM).
Testing reportedly took just six weeks and uncovered no major issues.
The report also said Meta intends to deploy about 7 gigawatts of computing infrastructure this year before doubling that capacity to 14 gigawatts next year.
The company is also expected to spend as much as $145 billion on AI infrastructure this year, while securing long-term supply agreements for memory, storage and networking components.
Meta did not immediately respond to Benzinga’s request for comments.
Price Action: Meta shares climbed 4.70% to close at $631.48 on Thursday, then added another 1.25% to $639.36 in after-hours trading, according to Benzinga Pro.
Benzinga Edge Rankings place Meta in the 88th percentile for Growth. While the stock has underperformed over the medium and long term, it has shown a strong price trend in the short term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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