Tech

AMD Acquires Silo AI for $665M to Rival Nvidia in AI Chips

AMD acquires Silo AI for $665 million to compete with Nvidia in AI chip market.

By Alex P. Chase

7/10, 09:21 EDT
Advanced Micro Devices, Inc.
NVIDIA Corporation
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Key Takeaway

  • AMD acquires Finnish AI start-up Silo AI for $665 million to compete with Nvidia in the high-performance chip market.
  • The acquisition aims to leverage Silo AI's 300-member team to build custom large language models, enhancing AMD's AI tech stack.
  • This move underscores AMD’s strategy to scale its business and improve customer engagement, highlighting the importance of software in the semiconductor industry.

AMD Acquires Silo AI

AMD has announced its acquisition of Finnish artificial intelligence start-up Silo AI for $665 million in an all-cash transaction. This move is one of the largest takeovers of a privately held AI start-up in Europe since Google acquired UK-based DeepMind for around £400 million in 2014. The acquisition is expected to close in the second half of this year, pending regulatory approval.

California-based AMD aims to leverage Silo AI's 300-member team to build custom large language models (LLMs), similar to those used in chatbots like OpenAI’s ChatGPT and Google’s Gemini. Vamsi Boppana, senior vice-president of AMD’s artificial intelligence group, stated, “This agreement helps us both accelerate our customer engagements and deployments while also helping us accelerate our own AI tech stack.”

Silo AI, headquartered in Helsinki, is among the largest private AI labs in Europe and offers tailored AI models and platforms to enterprise customers. The Finnish company has been working on building LLMs in European languages, including Swedish, Icelandic, and Danish. Peter Sarlin, Silo AI co-founder and chief executive, called the acquisition the “logical next step” for the company to become a “flagship” AI entity.

Competitive Landscape

AMD’s acquisition of Silo AI is a strategic move to compete with Nvidia, which currently dominates the high-performance chip market. Nvidia’s success has propelled its valuation past $3 trillion this year, driven by the demand for computing infrastructure to support large AI models. AMD has been rolling out its MI300 chips to challenge Nvidia’s “Hopper” line of chips.

Silo AI’s commitment to “open source” AI models, which are available for free and can be customized by anyone, sets it apart from companies like OpenAI and Google, which favor proprietary models. Silo AI’s open models, known as “Poro,” aim to strengthen European digital sovereignty and democratize access to LLMs.

The acquisition also highlights the growing scrutiny from regulators in Brussels and the UK on buyouts by Silicon Valley companies. Europe-based AI start-ups, including Mistral, DeepL, and Helsing, have raised significant funds this year as investors seek local champions to rival US-based companies like OpenAI and Anthropic.

Strategic Implications

The acquisition of Silo AI is part of AMD’s broader strategy to scale its business and enhance customer engagement with its AI offerings. AMD views Silo AI as a crucial link between its foundational AI software and real-world applications. The deal underscores the importance of software in the semiconductor industry, as companies seek to lock in customers to their hardware and generate more predictable revenues.

Nvidia’s success in the AI market is largely attributed to its investment in Cuda, a proprietary software platform that allows its chips to run a wide range of applications. Nvidia has expanded its software offerings to include over 600 pre-trained models and recently introduced a “microservices” platform called NIM, which enables developers to build chatbots and AI “co-pilot” services quickly. Historically, Nvidia has offered its software free of charge to buyers of its chips but plans to charge for products like NIM in the future.

AMD is also contributing to the development of Triton, an OpenAI-led rival to Cuda, which aims to allow AI developers to switch more easily between chip providers. Other contributors to Triton include Meta, Microsoft, and Intel.

Street Views

  • Vamsi Boppana, AMD (Bullish on AMD's AI capabilities):

    "This agreement helps us both accelerate our customer engagements and deployments while also helping us accelerate our own AI tech stack."

Management Quotes

  • Peter Sarlin, CEO of Silo AI:

    "[The acquisition is the] logical next step as the Finnish group seeks to become a 'flagship' AI company."