AMD Has Promised OpenAI and Meta Up to 320 Million Shares for a Penny Each. Here's What That Does to the Share Count.

When Advanced Micro Devices (NASDAQ:AMD) agreed in October 2025 to supply OpenAI with up to 6 gigawatts of its artificial intelligence (AI) chips, it also gave OpenAI a warrant for up to 160 million AMD shares at $0.01 each. In February, Meta Platforms (NASDAQ:META) signed on for up to another 6 gigawatts and got a similar deal.

The last batch of shares under each warrant carries a $600 stock price threshold. This looked far off when the OpenAI deal was announced, with AMD stock near $165. But the stock first closed above $600 on Sept. 21, and it traded around $616 as of this writing.

At that price, 320 million shares would be worth about $197 billion.

Image source: Advanced Micro Devices Inc.

AMD stock is already past $600

The two warrants work nearly the same way. Each covers up to 160 million shares at an exercise price of a penny. The first tranche vests with the customer's first gigawatt of AMD Instinct graphics processing units (GPUs), and all 160 million shares vest only when its purchases hit 6 gigawatts. A gigawatt measures the electricity a data center draws, so it sizes a deployment by power instead of by chip count.

Each tranche also has a stock price threshold, and those climb to $600 for the final tranche. OpenAI's warrant adds separate stock-performance thresholds on top of that. OpenAI and Meta have technical and commercial conditions to meet, too, before vested shares can be exercised. OpenAI's warrant runs through Oct. 5, 2030, and Meta's through Feb. 23, 2031.

As of June 27, no warrant shares had vested, according to AMD's latest quarterly filing. That's not a surprise, because shipments for both customers' first gigawatt were set to start in the second half of this year. But with the stock over $600, I think the GPU deliveries now matter more for vesting than the share price does.

How much would the share count rise?

AMD had around 1.63 billion shares outstanding as of July 29, according to its second-quarter 10-Q. Adding 320 million would bring the total to around 1.95 billion.

In other words, OpenAI and Meta might wind up owning around 16% of the enlarged company. Every current share's claim on AMD's profit would drop by about the same 16%, with the same earnings spread among more shares.

And buybacks can't help much. AMD bought back just $221 million of its stock in the first half of 2026. Even the $9.2 billion left on its authorization as of June 27 would retire only around 15 million shares at about $616 per share.

Meanwhile, AMD's pending all-stock purchase of AI research lab World Labs, valued at about $8.2 billion, might add roughly 13 million extra shares at this price.

12 gigawatts of GPUs

The warrant shares only appear if the GPUs ship, though.

"[I]n terms of the revenue per gigawatt, I think we've said double-digit billions. We're still in that range," CEO Lisa Su said on AMD's second-quarter earnings call in August.

Even at the bottom of that range, 12 gigawatts comes to at least $120 billion in revenue before every warrant share vests. That's more than seven times the $16.6 billion AMD's data center segment brought in during all of 2025.

And the segment is gaining speed. Data center revenue climbed from $5.4 billion in Q4 2025 to $5.8 billion in Q1 2026 and $6.7 billion in Q2 -- more than doubling year over year in that latest quarter. Sequential growth accelerated from around 7% to 16%.

Sure, AMD is giving up lots of stock for these sales. Split evenly, 320 million shares across 12 gigawatts is around 27 million shares a gigawatt, or about $16 billion in stock at $616 a share. AMD hasn't revealed the size of each tranche, so the real number per gigawatt might differ.

Management argues the trade pays off. When the OpenAI deal was announced, CFO Jean Hu said it was "expected to be highly accretive to AMD's non-GAAP earnings-per-share." In other words, the extra profit should more than make up for the extra shares.

The dilution isn't my top worry

I think management's case is plausible. After all, the warrant shares can only exist if AMD delivers the sales behind them.

My bigger concern is the price. AMD stock costs around 40 times the earnings analysts expect for 2027. If all 320 million warrant shares existed now, the same profit would put the stock closer to 47 times earnings.

The stock is also already past the $600 mark set for the last tranche. But at around $616 per share, I think investors are paying now for gigawatts AMD still needs to deliver over the next several years.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy.