Softbank agreed to pay $6.5 billion for Silicon Valley Chip Start-Up Ampere computing on Wednesday, saying it has doubled when smartphone-based technology will dominate global data centers.
The deal also reflects the Japanese conglomerate belief that ampere chips could begin to play a key role in artificial intelligence.
Ampere was founded eight years ago to sell chips for data centers based on the technology of ARM Holdings, a British company that licenses chip designs that powered almost all mobile phones. SoftBank, which purchased ARM in 2016, has been working to use chips based on ARM technology more widely and based on different tasks.
“The future of artificial superintelligence requires groundbreaking computing power,” said Masayoshi's son, chairman and chief executive of SoftBank, in a prepared statement. “Ampre's expertise in semiconductors and high-performance computing will accelerate this vision and deepen our commitment to AI innovation in the US.”
Softbank said it operates Ampere as a wholly owned subsidiary under its own name.
The sale comes amid a shifting alliance with transactions driven by the fierce demand for chips used to power AI applications such as Openai's ChatGPT. In particular, SoftBank has announced a series of transactions to play a bigger role in this area.
In the flashiest move ever, his son joined President Trump in January and announced an initiative called Stargate. Open chief Sam Altman and Larry Ellison, chairman and founder of Oracle, Ampere's biggest investor and client.
His son, Altman and Ellison said Stargate will invest $500 billion to build an array of US data centers to facilitate Openai operations, starting at its Texas location. Nvidia was listed as the venture's leading technology partner. It provides a chip called a graphics processing unit or GPU, which makes up the bulk of AI calculations.
Another type of chip plays a central role in AI. These are microprocessors designed by Intel, advanced microdevice, and ARM that handles general purpose computing calculations. These chips work together with the GPU, called “host” processors, and manage AI jobs such as building special software programs called models. Typically, one microprocessor is used for each of the four NVIDIA GPUs sold.
These microprocessors are also sometimes used to handle AI tasks called “inference,” which involves providing answers to chatbot queries. Until now, Intel and AMD chips have accounted for almost all of the AI host processors and microprocessors used for inference.
But some influential companies want to change that. Nvidia has begun pushing the arm processor hard as an option for the host microprocessor, instead of the Intel or AMD chip.
It costs a lot of money. Market research firm IDC predicts that the market for microprocessors sold through AI will grow from $12.5 billion in 2025 to $33 billion by 2030.
AMD and Intel have pointed out that moving to the arm can require tedious changes to the software. They added that Nvidia not only supports arm technology, but also supports chips as an option along with the latest GPUs.
“Nvidia is still an important partner for us,” said Ronak Singhal, chief architect at Intel's Xeon Line of Data Center chip.
Ampere sells microprocessors primarily for general purpose data center jobs. However, recently announced plans for a chip called Aurora, with up to 512 small calculation engines. This is a design the company says is particularly suitable for AI inference applications.
The company, led by former Intel executive René James, has had several successes. However, the largest spenders in the sector (major companies like Amazon, Google, Microsoft, and more) have recently focused on developing their own microprocessors based on ARM technology rather than relying on startups.
Oracle is the exception. We offer online services equipped with Ampere chips and disclose fairness and debt investment in the company. As of May, Oracle said it held a 29% stake in Ampere. After accounting for the losses, the investment was valued at $1.5 billion.
As part of the purchase, Oracle and Carlyle Group have agreed to sell their stake in Ampere, a large private equity company that is also an Ampere investor.
Bloomberg reported last month that SoftBank is close to a deal to buy amperes.
