AMD set to acquire a major AI software company to challenge NVIDIA’s dominance in GPUs

On Tuesday, AMD announced its intention to acquire the artificial intelligence startup known as Nod.ai. This strategic move is a pivotal step in augmenting AMD’s software capabilities.

As AMD strives to keep pace with its competitor, NVIDIA, in the semiconductor industry, the company has earmarked substantial investments in essential software components required for its advanced AI chips. Over the course of more than a decade, NVIDIA has successfully established a dominant position in the AI chip market, thanks to its robust software offerings and the thriving ecosystem of software developers that support it.

AMD has vowed to invest in and build a unified collection of software to power the various chips the company makes.

“We are executing that strategy,” AMD president Victor Peng said in an interview with Reuters. “And doing it through internal investment as well as external acquisitions.”

The acquisition of Nod.ai fits into the strategy because its technology enables companies to deploy AI models that are tuned for AMD’s chips more easily. Nod.ai sells its technology to large data centre operators, among other customers.

The Santa Clara, California-based Nod.ai has raised roughly $36.5 million, according to PitchBook data.

Earlier this year, AMD created the AI group that will house the Nod.ai acquisition, Peng said. The group employs about 1,500 engineers – the vast majority of software-related – and AMD plans to continue to expand the team with 300 additional hires this year, and more in 2024.

“We have been growing rapidly, with plans for next year as well,” Vamsi Boppana, senior vice president, the Artificial Intelligence Group at AMD said.

The Nod.ai acquisition is the company’s second in the past few months, Peng said. When asked if the company planned to bolster its portfolio with additional acquisitions Peng said, “We’re always looking.”

(With input from agencies)