AMD is buying Silo AI, Europe's largest private AI lab, for $665 million in cash. This move aims to beef up AMD's AI offerings and help it compete more effectively with Nvidia in the booming AI market.
Silo AI, headquartered in Helsinki, Finland, has made a name for itself by developing AI models and solutions for big-name clients like Allianz, Philips, Rolls-Royce, and Unilever. The company's expertise spans various industries, showcasing the wide-ranging applications of its AI tech.
After the deal closes, Silo AI's CEO and co-founder Peter Sarlin will keep leading his team of AI experts. They'll join AMD's Artificial Intelligence Group, reporting to senior VP Vamsi Boppana. AMD expects to finalize the purchase in the second half of 2024.
For AMD, this isn't just about adding AI muscle. It's a clear sign that the company is doubling down on its strategy to deliver comprehensive AI solutions based on open standards. This approach aligns with growing industry demand for flexible, scalable AI technologies.
Boppana highlighted the strategic importance of the acquisition: "Silo AI's track record in developing cutting-edge AI models, including large language models built on our platforms, will speed up our AI strategy. We'll be able to roll out AI solutions for our global customers much faster."
The timing is crucial for AMD. Under CEO Lisa Su's leadership, the company has been pushing hard into the AI space, particularly with its MI300 accelerators. AMD projects these products will bring in about $4 billion this year. That's a hefty sum, but it's still dwarfed by NVIDIA's expected data center chip revenue of over $100 billion.
Industry players seem optimistic about the deal. Nokia's Chief Strategy and Technology Officer, Nishant Batra, expressed excitement about the potential of combining AMD's compute solutions with Silo AI's technologies. Dr. Pekka Manninen from Finland's CSC-IT Center for Science praised Silo AI's work in scaling large language model training on LUMI, Europe's fastest supercomputer, which runs on AMD hardware.
This purchase is part of AMD's broader AI investment strategy. In the past year, the company has poured over $125 million into a dozen AI firms and bought Mipsology and Nod.ai to expand its AI ecosystem.
While AMD's stock has climbed about 20% in 2024, it's lagging behind the wider semiconductor index and NVIDIA's impressive gains. Still, with a market value nearing $286 billion, AMD is trading close to its all-time high, suggesting investors believe in its long-term AI strategy.