A sweeping long-term agreement between Meta and Nvidia is set to redirect a substantial portion of next-generation AI processors into Meta’s rapidly expanding data center network — a development that may intensify existing chip shortages worldwide.

Expanding the AI hardware footprint

As part of the partnership, Nvidia will deliver millions of its latest Blackwell and Rubin GPUs, purpose-built for demanding AI workloads such as large-scale model training and real-time inference. Meta will also integrate Nvidia’s Spectrum-X Ethernet switching technology into its Facebook Open Switching System, creating tighter alignment between networking infrastructure and accelerated computing.

In addition, Meta plans a broader rollout of Nvidia’s Grace CPU platform. Although Grace processors are commonly paired with Blackwell GPUs, Nvidia characterized this initiative as the first major deployment centered primarily on Grace-based systems.

Billions committed to infrastructure

According to Nvidia CEO Jensen Huang, Meta operates AI systems at a scale unmatched by most enterprises. To sustain that growth, Meta projects capital expenditures between $115 billion and $135 billion this year, largely allocated to data center construction and high-performance computing infrastructure. Unlike cloud hyperscalers that lease computing power to customers, Meta is reserving the vast majority of this capacity for internal use.

Industry-wide consequences

The agreement highlights a broader industry dynamic: large technology companies are securing long-term access to advanced silicon, leaving fewer chips available on the open market. Analysts at IDC warn that AI-driven demand could continue pressuring semiconductor supply chains over the next two years, complicating hardware upgrades for many businesses.

Companies hoping to acquire Nvidia accelerators may face extended lead times and constrained inventory, pushing some organizations to consider alternative suppliers as competition for AI hardware intensifies.