According to insiders, Ampere Computing LLC, a semiconductor startup supported by Oracle founder Larry Ellison, is considering the possibility of selling.
According to informed sources, this chip design company has been working with a financial advisor in recent months to help secure acquisition intentions. Insiders say Ampere, headquartered in Santa Clara, California, is willing to negotiate a possible deal with a larger industry player.
This move indicates that Ampere believes that the path to an initial public offering is not easy. Although the company will benefit from the ongoing artificial intelligence boom, market competition is intensifying, with several large tech companies competing to develop chips of the same type as Ampere's production.
Insiders say Ampere is still considering and may still choose to remain independent. They added that although the company is no longer seeking an IPO in the near future, the possibility of a future listing has not been ruled out.
Ampere's spokesperson declined to comment. The representative of Oracle did not immediately respond to a request for comment.
According to previous reports, in 2021, Japan's SoftBank Group proposed a minority stake investment in Ampere, which designs semiconductors using Arm technology and is valued at $8 billion.
Artificial Intelligence Infrastructure
Ampere's early supporters also included Carlyle Group Inc. The chip company is striving to secure a larger share of billions of dollars in investment in projects supporting the development of artificial intelligence infrastructure, and this transaction is being completed at the right time.
This also marks a significant transformation for the company's founder and CEO, Renee James, who was once the president of Intel and considered taking Ampere public. The company announced in April 2022 that it had secretly applied for an IPO in the United States, as the world was emerging from remote work caused by the pandemic and demand for chips was surging.
Ampere stated that some of the largest cloud computing providers, including Microsoft and Google, are using its chips. But like all chip companies vying for the largest buyer orders for data center components, it is competing with internal chip development work as these companies aim to reduce their reliance on external technology.
This tense relationship may mean that Oracle will seek a say in Ampere's future, as the company's cloud computing efforts have always been a major supporter of its chips. Uber Technologies and other clients use Oracle Cloud Ampere based servers.
Industry restructuring
As the data center industry undergoes restructuring for the era of artificial intelligence, there is a strong interest in controlling critical components. However, like larger competitors Intel and AMD, Ampere has to cope with the shift in spending from central processing units (CPUs) to NVIDIA accelerator chips.
James insists that in the long run, Ampere's technology will win as data center power budgets continue to expand, as it is more energy-efficient than competitors' products.
Ampere has announced stronger products that it believes will create a larger customer base. The new product is manufactured using TSMC's latest production technology and has over 500 cores, which are the part of the chip responsible for processing data.
