AMD is set to swallow software biz Silo AI for $650 million in a bid to boost its own enterprise AI wares.

The chipmaker has signed a definitive agreement to buy Finnish developer that styles itself as "the largest private AI lab in Europe." The all-cash transaction is expected to close in the second half of this year, subject to the usual regulatory approvals.

AMD describes this as another step in efforts to build "end-to-end AI solutions based on open standards and in strong partnership with the global AI ecosystem." In practice, this is likely to mean bolstering its offerings against those of rival Nvidia, whose GPUs are backed by a comprehensive software stack for AI development.

Silo AI's CEO and co-founder Professor Peter Sarlin is to continue to lead the Silo AI team as part of the AMD Artificial Intelligence Group, reporting to AMD senior vice president Vamsi Boppana.

"Across every industry, enterprises are looking for fast and effective ways to develop and deploy AI solutions for their unique business needs," Boppana said in a statement.

Silo AI was founded in 2017 by Sarlin and ex-Nokia CTO Tero Ojanperä, among others. The company says it specializes in helping customers integrate AI features into their products, services and operations.

As well as Europe, Silo AI has operations in North America and lists companies such as Philips, Rolls-Royce, Allianz and Unilever as customers. It claims to have delivered more than 200 production-level AI projects to date.

"We have a well-established history of building successful AI products and delivering value to our customers," Sarlin claimed. "We look forward to becoming part of AMD to further scale our impact and develop enterprise solutions and AI models that address the most complex challenges with deploying AI at scale today."

AMD has invested over $125 million in a number of other AI companies in the last 12 months, but that figure is dwarfed by the $665 million to acquire Silo AI. Clearly, AMD believes it is worth it.

"While the deal will not materially impact AMD's financial performance, it has the potential to unlock a significant amount of business in the future," said AMD's Boppana in an interview.

TechMarketView principal analyst Simon Baxter noted that Nvidia continues to dominate the market both in sales of AI chips and the number of enterprise agreements it holds with tech suppliers.  

"Competitors like Intel and AMD still have a lot of catching up to do, but are investing significantly in both the hardware side, and in gaining more of a share of the market for AI solutions," he added.

Intel's GPUs have been something of a flop in recent years, and so it has focused instead on more specialized silicon like the Habana Gaudi3 chips.

AMD, however, has been catching up with Nvidia in the GPU stakes - its MI300X product is believed to be a match for Nvidia's H100 for some tasks, the company is promising the MI325 with 288 GB of HBM3E memory this year, and the MI350 is coming next year to compete against Nvidia's Blackwell B200.

But the market for AI is wide open, and filled not only with other AI developers like Silo AI, but also enterprise vendors including Dell and HPE that are touting their credentials as one-stop providers of AI solutions, largely tied to Nvidia GPUs and its AI Enterprise suite platform.

In light of this, Omdia Chief Analyst Roy Illsley questioned the wisdom of the move.

"This sounds like AMD following Nvidia, albeit many years behind. So I do question why and what they expect to gain from this," he told The Register.

"Having the entire stack from hardware to software sounds appealing, but in my opinion this approach will eventually be replaced with a model more like we have with virtualization; the hardware and software will be separated so that customers have greater choice," Illsley said. ®

https://www.theregister.com//2024/07/11/amd_buys_developer_silo_ai/