AMD Acquires Finnish AI Startup Silo AI for $665 Million to Challenge Nvidia in AI Market

In a significant move to bolster its artificial intelligence capabilities, AMD has announced the acquisition of Finnish AI startup Silo AI for $665 million. This acquisition is one of the largest takeovers of a private AI startup in Europe, marking a strategic effort by the US-based chipmaker to compete more aggressively with market leader Nvidia.

Expanding AI Capabilities

California-based AMD is integrating Silo AI’s 300-member team to leverage their expertise in developing custom large language models (LLMs). These models are crucial for powering advanced AI applications like chatbots, including OpenAI’s ChatGPT and Google’s Gemini. AMD expects the acquisition to close in the second half of this year, pending regulatory approval, to accelerate its customer engagements and deployments while enhancing its AI technology stack.

“This agreement helps us both accelerate our customer engagements and deployments while also helping us accelerate our own AI tech stack,” said Vamsi Boppana, senior vice president of AMD’s artificial intelligence group, in an interview with the Financial Times.

A Landmark Deal in the AI Sector

The acquisition of Silo AI is the largest deal involving a privately held AI startup in Europe since Google acquired UK-based DeepMind for approximately £400 million in 2014. This deal comes amidst increased regulatory scrutiny of Silicon Valley buyouts by Brussels and the UK authorities.

European AI startups, including Mistral, DeepL, and Helsing, have attracted significant investments as investors look for local champions to rival US-based giants like OpenAI and Anthropic. Helsinki-based Silo AI is one of the largest private AI labs in Europe, known for offering tailored AI models and platforms to enterprise customers. The company has also initiated projects to build LLMs in various European languages, such as Swedish, Icelandic, and Danish.


Competing with Nvidia

AMD’s acquisition of Silo AI is a strategic move to enhance its position in the AI market, where Nvidia currently dominates. Nvidia’s success in the high-performance chip market has propelled its valuation past $3 trillion this year. Nvidia’s proprietary software platform, Cuda, has been a significant driver of its dominance, enabling its chips to run various applications beyond their original computer graphics and video game design.

AMD aims to challenge Nvidia’s dominance with its MI300 chips, launched late last year as a direct competitor to Nvidia’s Hopper line of chips. By acquiring Silo AI, AMD seeks to scale its AI business quickly and drive customer engagement with its AI solutions. AMD views Silo AI’s custom model-building expertise as a crucial link between its foundational AI software and real-world applications.

Open Source Commitment

Silo AI stands out from other AI companies for its commitment to open-source AI models. The startup’s open models, known as “Poro,” are a step towards strengthening European digital sovereignty and democratising access to LLMs. This approach contrasts with the proprietary models favoured by companies like OpenAI and Google, attracting attention from antitrust regulators in Washington and Brussels.

Peter Sarlin, Silo AI co-founder and CEO, described the acquisition as the “logical next step” for the Finnish company. “We are committed to open-source AI models, which democratise access to advanced AI technologies and support European digital sovereignty,” Sarlin stated.

The Future of AI Innovation

The Silo AI acquisition underscores the growing importance of software in the semiconductor industry. As chipmakers seek to lock in customers and generate more predictable revenues, software platforms like Nvidia’s Cuda and AMD’s collaborative efforts on the OpenAI-led Triton project become increasingly critical. Triton aims to allow AI developers to switch more easily between chip providers, offering a competitive alternative to Cuda.

Nvidia’s extensive software ecosystem, which includes over 600 pre-trained models and a new microservices platform called NIM, highlights the competitive landscape AMD is entering. By integrating Silo AI’s capabilities, AMD hopes to accelerate its innovation and provide robust AI solutions that can compete with Nvidia’s offerings.

In conclusion, AMD’s acquisition of Silo AI represents a significant step in its strategy to enhance its AI capabilities and compete more effectively in the rapidly evolving AI market. This move not only strengthens AMD’s position but also underscores the critical role of innovation and collaboration in driving the future of AI technology. 


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