(Bloomberg) — Advanced Micro Devices Inc. (AMD) has announced its agreement to acquire Silo AI for $665 million in cash. This acquisition of the AI model maker aims to help AMD close the gap with its major competitor, Nvidia Corp.
The U.S.-based chipmaker is purchasing the Helsinki-based company, which is known as Europe’s largest private AI lab. Silo AI’s clients include prominent companies such as Allianz SE, Unilever Plc, and Rolls-Royce, a unit of Bayerische Motoren Werke AG. According to a statement released on Wednesday, Silo AI’s Co-founder and Chief Executive Officer, Peter Sarlin, will continue to lead his team within AMD’s Artificial Intelligence Group.
Santa Clara, California-based AMD is regarded as Nvidia’s most significant potential competitor in the rapidly expanding market for AI hardware. Both companies specialize in graphics chips, which are crucial for training the large language models that support user-facing services like OpenAI’s ChatGPT and Microsoft Corp.’s Copilot.
“Silo AI’s team of trusted AI experts and proven experience in developing leadership AI models and solutions, including state-of-the-art large language models built on AMD platforms, will further accelerate our AI strategy and advance the build-out and rapid implementation of AI solutions for our global customers,” stated AMD Senior Vice President Vamsi Boppana.
Following the announcement, AMD’s shares rose by 1.4% at 9:43 a.m. in New York.
Although AMD is relatively new to the AI development sector, it is rapidly expanding its hardware and software offerings. The company sees a significant opportunity in AI, similar to the sales boom experienced by Nvidia, which has become the world’s most valuable chipmaker.
Under the leadership of CEO Lisa Su, AMD has launched a line of MI300 accelerators, projecting around $4 billion in revenue from these products this year. This figure surpasses the projections of other competitors like Intel Corp. However, Nvidia is expected to generate over $100 billion this year from its data center chip business alone.
Silo AI specializes in developing AI models and systems tailored to the specific needs of individual companies. This acquisition is part of AMD’s broader strategy, building on the $125 million in investments it has made over the past year to enhance its suite of offerings and streamline the use of AMD chip-based systems.
In 2024, AMD’s stock has increased by about 20%, which is less than the 38% rise of the Philadelphia Stock Exchange Semiconductor Index and the 165% gain by Nvidia. Despite this modest relative gain, AMD’s market capitalization of $286 billion remains near an all-time high for the company.
