AMD acquires chip, software startup Pensando to enhance data center capabilities
- AMD is expected to complete the acquisition of chip, software startup Pensando in the second quarter of this year
- The deal enables AMD to add Pensando’s platform to its line of processors and graphics chips, amidst a booming demand from cloud and enterprise sectors
- Pensando’s CEO Prem Jain and the entire team will THEN join AMD’s Data Center Solutions Group
Two months ago, Advanced Micro Devices Inc. (AMD) closed its biggest-ever acquisition — a US$49 billion deal to acquire Silicon Valley adaptable computing powerhouse Xilinx. This week, adding momentum to its ambitions in the data center chip market, AMD announced its intention to acquire data center optimization startup Pensando for approximately US$1.9 billion.
Pensando’s distributed services platform includes a high-performance, fully programmable packet processor and comprehensive software stack that accelerate networking, security, storage and other services for cloud, enterprise, and edge applications. AMD chair and CEO Lisa Su emphasized that acquisition is about helping data center operators lower the cost of ownership by using software to squeeze out every last bit of efficiency.
“Today, with our acquisition of Pensando, we add a leading distributed services platform to our high-performance CPU, GPU, FPGA and adaptive SoC portfolio. The Pensando team brings world-class expertise and a proven track record of innovation at the chip, software and platform level,” she said in a statement.
Pensando’s products are already deployed at scale across cloud and enterprise customers, including Goldman Sachs, IBM Cloud, Microsoft Azure, and Oracle Cloud. For Pensando CEO and co-founder Prem Jain, the deal allows the company to grow faster inside the larger organization than it could on its own.
“Joining together with AMD will help accelerate growth in our core business and enable us to pursue a much larger customer base across more markets,” he said. Jain will also be joining the data center solutions group at AMD when the deal closes. The deal is expected to be concluded in the second quarter of this year.
How will the deal with the chip software startup benefit AMD?
Pensando produces chips and software designed to speed data flow and lower operating costs for big server farms, AMD said. For AMD, The combination of their CPUs, GPUs, FPGAs, and adaptive computing engines with Pensando’s packet processor and software technologies will enable the company to offer a broad portfolio of compute engines that have been optimized for different workloads.
“We believe this is going to be a critical requirement to deliver the performance, power efficiency and capabilities required to power the next generation of accelerated data centers at scale. With the addition of Pensando, AMD will have the capability to innovate at the chip, software and platform level and deliver optimized solutions with unmatched performance and value for our cloud and enterprise customers,” AMD said in a fact sheet.
As a company that has been providing chips to power the world’s computers and servers, AMD has in recent years gained a performance edge on Intel, its main rival in CPUs. The company also has a big business operation supplying graphics-processing chips for personal computers and video game consoles. According to Mercury Research, AMD had a 10.7% share of the market for data-center CPUs in the final quarter of 2021, up by 3.6 percentage points from a year earlier.