Home Web graphics AMD buys cloud startup Pensando for $1.9 billion in data center

AMD buys cloud startup Pensando for $1.9 billion in data center

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Signs of AMD are seen at the China Digital Entertainment Expo and Conference, also known as ChinaJoy, in Shanghai, China July 30, 2021. REUTERS/Aly Song

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April 4 (Reuters) – Chip designer Advanced Micro Devices (AMD.O) said on Monday it would acquire cloud startup Pensando for $1.9 billion to bolster its data center products and capitalize on the growing demand from cloud and enterprise sectors.

AMD said the transaction value does not include working capital and other adjustments.

Pensando, which was founded in 2017 by a group of four former engineers from Cisco Systems Inc (CSCO.O), counts Goldman Sachs (GS.N) and Microsoft Corp’s Azure cloud unit (MSFT.O) among its customers .

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The startup manufactures a fully programmable processor and software platform, which helps enterprise customers and data center customers operate more like cloud computing data centers like Amazon (AMZN.O) Amazon Web Services.

In cloud computing, customers can order as much computing power as needed in different parts of the world with just a few mouse clicks. The software takes care of the mechanisms for shuffling data to the correct physical machines.

The lucrative data center chip business is plagued by competition, with AMD rivals Intel Corp (INTC.O) and Nvidia Corp

Only last month, Nvidia released a new chip to speed up artificial intelligence functions in data centers. Read more

The deal, which would see AMD add Pensando’s platform to its lineup of processors and graphics chips, is expected to close in the second quarter of this year.

Pensando CEO Prem Jain and the entire team will join AMD’s Data Center Solutions Group.

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Reporting by Chavi Mehta in Bengaluru and Jane Lanhee Lee; Editing by Amy Caren Daniel

Our standards: The Thomson Reuters Trust Principles.