AMD Acquires Silo AI for $665M to Challenge NVIDIA

On Wednesday, July 10, industry sources in the UK announced that AMD will acquire Finnish AI startup Silo AI for $665 million. This strategic acquisition is aimed at enhancing AMD's AI capabilities and positioning the company as a strong competitor against market leader NVIDIA.

Following the announcement, AMD's pre-market stock price increased by 1.54%, reaching $179.83 per share.

AMD revealed that Silo AI's team of 300 experts will leverage their software tools to develop customized large language models (LLMs). The all-cash transaction is anticipated to close in the second half of this year, subject to regulatory approval.

Vamsi Boppana, Senior Vice President of AMD's AI division, stated to the Financial Times that this acquisition will accelerate AMD's engagement and deployment with clients, as well as advance its AI technology development.

According to Dealroom data, this acquisition represents the largest purchase of a private AI startup in Europe since Google acquired UK-based DeepMind for approximately £400 million in 2014.

This acquisition occurs amidst increased scrutiny from EU and UK regulators on tech company acquisitions. European AI startups like Mistral, DeepL, and Helsing have collectively raised hundreds of millions of dollars this year, as investors seek a local leader to compete with US-based OpenAI and Anthropic.

Silo AI, headquartered in Helsinki, Finland, is one of Europe’s largest private AI labs, specializing in providing bespoke AI models and platforms for enterprise clients. Last year, the company initiated a project to develop AI models in European languages such as Swedish, Icelandic, and Danish.

Silo AI is known for its commitment to "open-source" AI models, which are freely available for customization. This approach contrasts with companies like OpenAI and Google, which favor proprietary or "closed" models.

AMD’s AI technology competes directly with NVIDIA, which dominates the high-performance chip market. NVIDIA’s success has driven its market value past $3 trillion this year, as tech companies strive to build the computing infrastructure necessary for the largest AI models. AMD’s MI300 chips, launched at the end of last year, directly challenge NVIDIA's Hopper series chips.

The acquisition of Silo AI demonstrates AMD's intention to rapidly expand its operations and enhance customer engagement through its products. AMD views Silo AI’s expertise in creating custom models as a critical link between its "core" AI software and real-world applications.

Software has become a crucial area of competition for semiconductor companies, as they aim to secure customers within their hardware ecosystems and generate more predictable revenue streams beyond the cyclical nature of chip sales.