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Shares of Nvidia (NVDA) climbed around 1.5% in premarket trading Friday after Meta Platforms (META) CEO announced the social media giant plans to buy 350,000 of Nvidia’s H100 graphic processing units (GPUs). The move comes as part of Meta’s plan to build artificial general intelligence (AGI), technology that, if realized, could accomplish any intellectual task that human beings can perform.

Meta Likely to Spend At Least $9 Billion on Nvidia Chips

Meta Platforms intends to purchase 350,000 Nvidia H100 GPUs to support the company’s efforts to construct an advanced AI with human-like intelligence, co-founder and CEO Mark Zuckerberg announced on Thursday.

This announcement came as part of his revelation about Meta’s ongoing initiative to create an AGI capable of learning and performing diverse tasks.

Notably, Zuckerberg said in an Instagram post that Meta’s “future roadmap” for AI requires the tech giant to build a “massive compute infrastructure,” including 350,000 H100 chips by the end of 2024.

The billionaire did not reveal how many GPUs Meta has purchased from Nvidia, though the H100 was launched in 2022. Raymond James analysts say these high-end AI chips are priced between $25,000 and $30,000 and more than $40,000 on eBay.

If the Facebook owner is acquiring these GPUs at the lower end of this price spectrum, the estimated expenditure would approach nearly $9 billion.

Furthermore, Zuckerberg indicated that Meta’s computing infrastructure would encompass “almost 600k H100 equivalents of compute” when considering other GPUs. Meta, OpenAI, and Microsoft expressed interest in using the new Instinct MI300X AI computer chips from AMD in December.

According to Zuckerberg, these robust computer chips are essential for Meta’s exploration into AGI, a long-term vision for the company. Other entities, including OpenAI and Google’s DeepMind unit, are also researching this technology to develop a form of AI that approaches human-level intelligence.

Nvidia’s Outperformance Extends into 2024

Meta’s newly announced plan to acquire hundreds of thousands of Nvidia’s chips does not come as a surprise, given the latter’s vital role in the ongoing AI expansion.

Its AI chips, or GPUs, are large computers that handle and power generative AI software like ChatGPT. Considering that Nvidia controls roughly 80% of the GPU market, its unprecedented boom in 2023 is not a mystery.

The company’s share price more than tripled in 2023, hitting all-time highs multiple times in the past few months. This year, Nvidia’s stock advanced more than 18%, significantly outperforming the broader market.

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