Advanced Micro Devices (AMD) said it would acquire cloud startup Pensando for $1.9 billion to bolster its data center products business.
AMD said the deal value does not include working capital and other adjustments.
Lisa Su, Chair and CEO of AMD said all major cloud and OEM customers have adopted EPYC processors to power their data center offerings.
“With our acquisition of Pensando, we add a distributed services platform to our high-performance CPU, GPU, FPGA, and adaptive SoC portfolio,” Lisa Su said in a news statement on Monday.
Pensando was founded in 2017 by a group of four ex-Cisco Systems engineers. John Chambers is the chair of the board of Pensando. Pensando’s Chief Executive Officer Prem Jain and the entire team will join AMD’s Data Center Solutions Group.
Goldman Sachs, IBM Cloud, Microsoft Azure and Oracle Cloud are some of the main customers of Pensando.
The startup makes a programmable processor and a software platform, which helps enterprise clients and data center customers to function more like cloud computing data centers like Amazon’s Amazon Web Services.
The performance and scale of Pensando’s distributed services platform is 8x-13x of the largest cloud provider and uses less power. Pensando’s smart switching architecture has 100x the scale, 10x the performance at one-third the cost of ownership of any comparable products in the enterprise market, John Chambers said.
AMD rivals include Intel and Nvidia.
Last month, Nvidia had released a new chip to speed up artificial intelligence functions in data centers.
The deal, which would enable 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.