AMD spends $665 million to acquire Silo AI, competing head-to-head with rival NVIDIA

According to the Financial Times, Advanced Micro Devices (AMD) is set to acquire Finnish artificial intelligence (AI) startup Silo AI for $665 million, aiming to expand its AI services to compete with market leader NVIDIA (NVDA-US).

Following the news, AMD's (AMD-US) stock price rose slightly on Wednesday.

AMD stated that the 300 members of Silo AI will use its software tools to build custom large language models (LLMs). The all-cash acquisition is expected to be completed in the second half of this year, subject to regulatory approval.

Vamsi Boppana, Senior Vice President of AMD's AI Business Group, told the Financial Times that the deal will help the company accelerate engagement and deployment with customers, as well as speed up its own AI technology.

According to Dealroom data, this is the largest private AI startup acquisition in Europe since Google acquired UK-based DeepMind for around £400 million in 2014.

At a time when US Silicon Valley tech companies' acquisitions are facing stricter scrutiny from EU and UK regulators, European-based AI startups such as Mistral, DeepL, and Helsing have raised hundreds of millions of dollars this year. Investors are looking for a local champion to compete with US giants like OpenAI and Anthropic.

Based in Helsinki, Finland, Silo AI is one of Europe's largest private AI labs, providing tailored AI models and platforms for enterprise clients. The Finnish company launched a project last year to offer a master's program in law in European languages such as Swedish, Icelandic, and Danish.

Silo AI focuses on "open-source" AI models that are freely available for customization by anyone. This differs from companies like OpenAI and Google, which tend to use their proprietary or "closed" models.

AMD's AI technology competes with NVIDIA, which dominates most of the high-performance chip market. NVIDIA's success has pushed its market value to over $3 trillion this year, with tech companies currently working to build the computational infrastructure needed to power the largest AI models. AMD launched its MI300 chip at the end of last year, directly challenging NVIDIA's "Hopper" series of chips The transaction with Silo indicates that AMD is seeking to rapidly expand its business scale and drive customer engagement through its own products. AMD views Silo, which establishes a customized model for customers, as the "foundation" of its AI software and the link between this technology and real-world applications.

Software has now become a new battleground for semiconductor companies, as these companies attempt to lock in customers on the hardware side and create more predictable revenue streams outside the boom and bust cycles of chip sales