AMD buys Finnish startup Silo AI for $665M to compete with Nvidia

Unlock Editor’s Digest for free

AMD is set to buy Finnish artificial intelligence startup Silo AI for $665 million. It is one of the largest acquisitions of its kind in Europe. The American chipmaker wants to expand its AI services to compete with market leader Nvidia.

California-based AMD said Silo’s 300-member team would use its software tools to build custom large language models (LLMs), the kind of AI technology that underpins chatbots such as OpenAI’s ChatGPT and Google’s Gemini. The all-cash acquisition is expected to close in the second half of this year, subject to regulatory approvals.

“This agreement helps us accelerate our customer engagement and deployments while also accelerating our own AI tech stack,” Vamsi Boppana, senior vice president of AMD’s artificial intelligence group, told the Financial Times.

According to data from Dealroom, the acquisition is the largest of a private AI start-up in Europe since Google bought UK-based DeepMind for around £400m in 2014.

The deal comes as buyouts by Silicon Valley companies face increased scrutiny from regulators in Brussels and the UK. Europe-based AI startups including Mistral, DeepL and Helsing have raised hundreds of millions of dollars this year, as investors search for a local champion to rival the likes of US-based OpenAI and Anthropic.

Helsinki-based Silo AI, one of the largest private AI labs in Europe, offers custom AI models and platforms to enterprise clients. The Finnish company last year launched an initiative to build LLMs in European languages, including Swedish, Icelandic and Danish.

AMD’s AI technology competes with that of Nvidia, which has captured the lion’s share of the high-performance chip market. Nvidia’s success has pushed its valuation above $3 trillion this year, as technology companies scramble to build the compute infrastructure needed to power the biggest AI models. AMD began rolling out its MI300 chips late last year, a direct challenge to Nvidia’s “Hopper” line of chips.

Peter Sarlin, co-founder and CEO of Silo AI, called the acquisition the “logical next step” as the Finnish group aims to become a “flagship” AI company.

Silo AI is committed to “open source” AI models, which are freely available and can be modified by anyone. This sets it apart from companies like OpenAI and Google, which prefer their own proprietary or “closed” models.

The startup previously described its family of open models, called “Poro”, as an important step towards “strengthening European digital sovereignty” and democratising access to LLMs.

Meanwhile, the concentration of the most powerful LLMs in the hands of a few large American technology companies is attracting the attention of antitrust authorities in Washington and Brussels.

The Silo deal signals AMD’s desire to rapidly scale its business and increase customer engagement with its own offerings. AMD sees Silo, which builds custom models for customers, as a bridge between its “foundational” AI software and real-world applications of the technology.

Software has become a new battleground for semiconductor companies, as they try to tie customers to their hardware and generate more predictable revenue outside the peak and downturn cycle of chip sales.

Nvidia’s success in the AI ​​market is due to its multi-billion dollar investment in Cuda, the company’s proprietary software that allows chips originally intended for computer graphics and video game processing to run a wider range of applications.

Since Nvidia began developing Cuda in 2006, it has expanded its software platform with a range of apps and services, largely aimed at enterprise customers who lack the internal resources and skills of Big Tech companies to build on its technology.

Nvidia now offers more than 600 “pre-trained” models, making them easier for customers to deploy. The Santa Clara, California-based group last month began rolling out a “microservices” platform called NIM that promises to let developers quickly build chatbots and AI “co-pilot” services.

Nvidia has traditionally offered its software for free to chip buyers, but this year announced that it plans to start charging for products like NIM.

AMD is among the companies helping develop an OpenAI-led rival to Cuda, called Triton, which should make it easier for AI developers to move between chip vendors. Meta, Microsoft and Intel have also worked on Triton.

Video: AI: A blessing or a curse for humanity? | FT Tech

Leave a Comment