In a bid to reinforce its software capabilities and advance in the AI chip market, Advanced Micro Devices (AMD) has announced its intent to acquire the artificial intelligence startup Nod.ai.
The latest Gartner report said semiconductors designed to execute artificial intelligence (AI) workloads will represent a $53.4 billion revenue opportunity for the semiconductor industry in 2023, an increase of 20.9 percent from 2022.
AI semiconductor revenue will continue to experience double-digit growth through the forecast period, increasing 25.6 percent in 2024 to $67.1 billion. By 2027, AI chips revenue is expected to be more than double the size of the market in 2023, reaching $119.4 billion.
AMD is intensifying its efforts to compete with rival chipmaker Nvidia by making substantial investments in critical software tailored for their advanced AI chips. Nvidia’s -standing dominance in the AI chip market can be attributed to their robust software and developer ecosystem, prompting AMD to commit to building an integrated software collection to power their diverse chip offerings.
Victor Peng, President of AMD, stated in an interview with Reuters, “We are executing to that strategy,” underscoring the importance of both internal investment and external acquisitions in fulfilling this strategy.
The acquisition of Nod.ai aligns seamlessly with this strategy, as their technology facilitates the seamless deployment of AI models specifically optimized for AMD’s chips. Nod.ai caters its technology to various clientele, including large data center operators.
However, the financial specifics of the Nod.ai acquisition have not been disclosed by AMD. Nod.ai, headquartered in Santa Clara, California, has reportedly raised approximately $36.5 million, according to data from PitchBook.
Earlier this year, AMD established an AI group to integrate the forthcoming Nod.ai acquisition into their operations. This group already comprises approximately 1,500 engineers, predominantly focused on software-related roles. AMD intends to bolster the team by hiring an additional 300 engineers in the current year, with further expansions planned for 2024.
“We have been growing rapidly, with plans for next year as well,” stated Vamsi Boppana, Senior Vice President of the Artificial Intelligence Group at AMD.
The acquisition of Nod.ai marks AMD’s second strategic acquisition in recent months, following their purchase of Xilinx, a provider of adaptive and intelligent computing solutions. This acquisition signifies AMD’s ongoing commitment to fortifying its position in the evolving AI and chip market.