Advanced Micro Devices Inc. will sell artificial intelligence chips to Facebook owner Meta Platforms Inc. in a $100 billion deal that advances AMD’s position in the race for dominance in AI chipmaking.

It also gives Meta the opportunity to buy as much as 10% of AMD. The chipmaker’s shares jumped.

AMD has a major presence in Central Texas, where it has operated since 1979. Though the company is based in Santa Clara, Calif., CEO Lisa Su runs the business from Austin, where it employs about 3,700 people and is growing with the recent announcement of a data center near Rockdale.

Meta also has operations in Austin, with offices downtown.

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Under the deal, it will buy AMD’s latest chips, the MI450, to help power data centers. The 6-gigawatt agreement will see shipments supporting the first gigawatt deployment set to start during the second half of this year.

AMD made a similar chips-for-stake deal with OpenAI earlier this year. The ChatGPT maker plans to use AMD chips as it builds billions of dollars worth of data centers in Texas, New Mexico, Ohio and an as-yet unspecified site in the Midwest.

The turn toward AMD and other chipmakers comes as Nvidia Corp., the world’s most valuable company, raises prices on its semiconductors. Companies like Meta and OpenAI, longtime customers of Nvidia, have started pursuing alternatives as they build more data centers. 

It carved out an early lead in converting its chipsets, known as graphics processing units or GPUs, from use in powering video games to helping train powerful AI systems like the technology behind ChatGPT and image generators. Demand skyrocketed as more people began using AI chatbots. Tech companies now are scrambling for chips to build and run them.

Thanks to the rich deals, Wall Street investors are questioning whether the rapdily growing AI boom is an economic bubble that will soon burst. As such an expensive industry, AI is dominated by a select few companies that are expanding investment in one another. The AMD deal, for example,  comes just days after Meta announced a long-term partnership to use millions of chips and other equipment from Nvidia for its AI data centers.

Shares of AMD were up more than 10% before the market opened Tuesday and continued rising in regular trading.

The companies said that AMD issued Meta a performance-based warrant for up to 160 million shares of its common stock at 1 cent apiece, structured to vest as long as certain milestones are achieved.

The first tranche vests with the initial 1-gigawatt of shipments with additional portions vesting as Meta’s purchases scale to 6 gigawatts.

Meta is also a major employer in Austin. According to Opportunity Austin, the Facebook owner employs about 2,000 people in downtown offices but there have been several rounds of layoffs since that number was recorded and its current employment is unclear. 

Shares in Meta and Nvidia both gained slightly.

This is a developing story. Please check back for updates.