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

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

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

AMD said the deal’s value does not include working capital and other adjustments.

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

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The startup is making a fully programmable processor and software platform, enabling enterprise and data center customers to function more like cloud computing data centers like Amazon’s (AMZN.O) Amazon Web Services.

With cloud computing, customers can order as much computing power as they need with just a few clicks in different parts of the world. The software takes care of the mechanics of shuffling the data to the appropriate physical machines.

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

Just last month, Nvidia released a new chip to accelerate artificial intelligence functions in data centers. read more

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

Pensando’s Chief Executive Officer 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.

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