Get All Access for $5/mo

Nvidia's Biggest Rival Agrees to Buy an AI Startup for Over Half a Billion Dollars in Cash AMD's deal is set to close later this year.

By Sherin Shibu Edited by Melissa Malamut

Key Takeaways

  • AMD is trying to compete with Nvidia and gain a larger foothold in the AI chip industry with a new acquisition.
  • AMD announced on Wednesday that it will acquire Silo AI for $665 million in cash to help AMD develop new AI chips.
  • According to AMD executives, the deal will not affect AMD's financial performance and "unlocks a significant amount of business."

AMD is leveling up its AI chip strategy against industry leader Nvidia by acquiring an AI startup.

AMD disclosed on Wednesday that it will acquire Silo AI, a Finnish startup that calls itself "Europe's largest private AI lab." The all-cash deal is worth about $665 million and is expected to close in the second half of this year.

Related: Nvidia Is 'Slowly Becoming the IBM of the AI Era,' According to the Leader of a $2 Billion AI Startup

The deal will not affect AMD's financial performance as it "unlocks a significant amount of business moving forward," AMD senior vice president Vamsi Boppana told Reuters.

The over half-a-billion dollar buy eclipses the $125 million that AMD has invested in AI companies over the past 12 months. AMD also brought France-based Mipsology and Santa Clara-based Nod.ai into the fold last year for undisclosed sums.

Nvidia also could have been an AMD acquisition, had things gone differently nearly 20 years ago: According to industry insiders, AMD almost bought Nvidia in 2006. The merger reportedly fell through because Nvidia CEO Jensen Huang wanted to lead the combined company.

AMD CEO Lisa Su. Photographer: Annabelle Chih/Bloomberg via Getty Images

Nvidia currently dominates the AI chip market, with between 70% and 95% of the market share, though competition is increasing from all corners. Established chipmakers like Intel and AMD are ramping up their efforts while startups like Tenstorrent join the race too, with AMD considered in second place to Nvidia at the moment.

AMD's new acquisition, Silo AI, employs over 300 AI experts, including over 125 AI scientists with doctorate degrees. The startup operates in North America and Europe, creating both open-source AI models and custom AI solutions for clients like Unilever and Philips.

Related: Nvidia CEO Jensen Huang Turned Down a Merger Offer in the Company's Early Days, According to Insiders. Here's Why.

Boppana emphasized the wealth of AI talent at Silo AI as well as the team's experience building AI on AMD platforms in a press release. He stated that the acquisition "will further accelerate" AMD's AI development, a statement AMD CEO Lisa Su also echoed.

AI development takes millions, if not billions, of dollars. Anthropic CEO Dario Amodei stated in June that training an AI model now costs around $100 million, but "there are models in training today that are more like a billion."

Nvidia's biggest customers, Microsoft, Meta, Amazon, and Alphabet's Google, are also believed to be building their own AI chips, which could decrease their reliance on Nvidia over time. Google's environmental report last week showed that the tech giant expects to produce more emissions as it keeps investing in AI development.

Related: How Much Does It Cost to Develop and Train AI? Here's the Current Price, According to the CEO of an $18 Billion AI Startup.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Amazon Pulls Merch Celebrating Alleged UnitedHealthcare CEO Killer Luigi Mangione

Apparel and home goods featuring the phrase "deny, defend, depose" have been pulled from Amazon.

Franchise

McDonald's Announces the Return of the Snack Wrap in 2025 — Here's What to Expect From Its Comeback

The decision comes after years of persistent customer demand for the portable snack, which debuted nearly two decades ago.

Leadership

She Turned Her Pandemic Hobby Into a Full-Time Business. Now Her Heritage-Inspired Candles Are Sold in Retailers Like Nordstrom and Barnes & Noble.

Melissa Gallardo creates premium home fragrances in candle form, all inspired by her Latin heritage. As she continues to build and grow her business, these are the lessons she wants to share with other founders.

Growing a Business

This Chef Went From Dreaming of Michelin Stars to Building an Audience as a YouTube Star

Chef Sohla El-Waylly never set out to be a food content creator, but a series of events led her to her current career.

Business News

Who Is Luigi Mangione? UnitedHealthcare CEO Brian Thompson Murder Suspect Arrested, Faces Several Charges

Mangione, 26, has been charged in connection with the killing of Thompson.

Business News

'Carefully Crafted Charade': Rupert Murdoch, 93, Loses Legal Battle to Change Family Trust

A Nevada commissioner ruled that Murdoch and his chosen successor had acted in bad faith.