Nvidia (NASDAQ:NVDA) rose 1.6% in premarket trading Wednesday, while Meta Platforms (NASDAQ:META) gained about 1% after the two companies unveiled an expanded multiyear partnership to scale Meta’s artificial intelligence infrastructure with Nvidia technology.
Under the agreement, Meta will develop hyperscale data centers tailored for AI training and inference workloads. The rollout will include millions of Nvidia Blackwell and Rubin GPUs, as well as Nvidia CPUs. Nvidia’s Spectrum-X Ethernet switches will also be integrated into Meta’s network architecture.
“No one deploys AI at Meta’s scale — integrating frontier research with industrial-scale infrastructure to power the world’s largest personalization and recommendation systems for billions of users,” said Jensen Huang, Nvidia’s founder and CEO.
The deal marks the first major deployment of Nvidia’s Grace-only CPUs, which are designed to improve performance per watt in Meta’s data centers. The companies are also working together on implementing Nvidia Vera CPUs, with potential large-scale adoption targeted for 2027.
Meta has further incorporated Nvidia Confidential Computing into WhatsApp to enhance AI-driven features while safeguarding user privacy, with plans to extend these capabilities across its broader platform ecosystem.
“We view the deal as an incremental positive for NVDA,” said RBC Capital Markets analyst Srini Pajjuri.
He added that the opportunity is “clearly incremental for Nvidia” and could also benefit Arm Holdings (NASDAQ:ARM). However, he noted that wider deployment of Nvidia’s standalone CPUs at Meta may represent a modest headwind for Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) in the server CPU segment tied to Meta.
AMD shares fell 1.2% in premarket trading, while Arista Networks (NYSE:ANET) declined roughly 3%.
Still, Pajjuri emphasized that overall server CPU demand remains robust, with demand continuing to outpace supply, fueled by Agentic AI, retrieval-augmented generation and other emerging applications.
“As such, we expect any impact to AMD and INTC’s near term estimates to be modest,” he said.