AMD to Acquire AI Software Startup to Catchup with Nvidia

Advanced Micro Devices (AMD.US) announced on Tuesday its plans to acquire an artificial intelligence startup called Nod.ai. The move is part of an effort to enhance its software capabilities to compete with established giants.

Also read: Nvidia Leads $32 Million Investment in a Robot Factory  

External Acquisitions to Boost Competitiveness

After more than a decade of dominance in the chip industry, Nvidia has built a strong edge in the AI chip market through its own manufactured software and ecosystem of software developers. To catch up with rival Nvidia, AMD plans to invest heavily in key software needed for the company’s advanced artificial intelligence chips.

AMD has plans to invest in and build a unified collection of software to power the various chips the company makes.

We are executing to that strategy,” AMD President Victor Peng said in an interview, “And doing it through internal investment as well as external acquisitions.”

The acquisition of Nod.ai is in line with AMD’s strategy, as its technology makes it easier for businesses to deploy AI models that are adapted for AMD chips. Nod.ai sells its technology to large data center operators and other customers.

1,500 Engineers and an Undisclosed Deal

AMD did not disclose the terms of the deal. Santa Clara, California-based Nod has raised about $36.5 million, according to PitchBook.

Earlier this year, AMD formed its Artificial Intelligence Group, which will be responsible for acquiring Nod.ai, Peng said. The group employs about 1,500 engineers – the vast majority related to software. AMD plans to continue expanding the team this year, adding 300 employees and more in 2024.

“We’ve been growing fast and have plans for next year,” said Vamsi Boppana, senior vice president of AMD’s Artificial Intelligence group.

Peng said the Nod.ai acquisition is the company’s second acquisition in the past few months. Asked if the company plans to strengthen its portfolio with additional acquisitions, AMD said, “We’re always looking.”

AMD Aiming to Boost AI Computing

Artificial intelligence has been a key theme in the chip industry so far this year, driving up the stock prices of chip companies and helping Nvidia become the first and only semiconductor company with a trillion-dollar valuation.

Investors are hoping AMD can come up with a chip that can challenge Nvidia’s most powerful AI semiconductors and help meet strong demand for chips that can power applications such as ChatGPT.

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