• Chip giant AMD is in a small pack of companies trying to catch up with Nvidia in the AI processor and supporting software sector
• It has struck a deal to acquire Finnish lab Silo AI, which develops AI models, platforms and solutions for enterprises
• It’s not AMD’s first AI acquisition but its the most meaningful
• But it’s still not enough to help it gain parity with Nvidia any time soon, according to one experienced analyst

In an effort to position itself at the front of the pack chasing clear market leader Nvidia in the growing and valuable AI processor and associated software sector, chip giant AMD has agreed to acquire Helsinki, Finland-based Silo AI for $665m in cash.

For AMD, the acquisition, which is set to close before the end of this calendar year, “represents another significant step in the company’s strategy to deliver end-to-end AI solutions based on open standards and in strong partnership with the global AI ecosystem.”

Silo AI, which describes itself as Europe’s “largest private AI lab,” has about 300 AI experts that help enterprises develop “tailored AI models, platforms and solutions” and who have plenty of experience in developing AI solutions that run on AMD silicon.

The acquisition also gives AMD some big-name enterprise customers in the form of Allianz, Philips, Rolls-Royce and Unilever, and an AI development relationship with Nokia. “As a leading European AI company, Silo AI has been a great long-term partner for us in many AI-related projects,” noted Nishant Batra, Nokia’s chief strategy and technology officer (CSTO). “We look forward to the enhanced capabilities the combination of AI technologies and innovative compute solutions from AMD will bring,” added Batra.

Silo AI’s CEO and co-founder, Peter Sarlin, will continue to lead the Silo AI team as part of the AMD Artificial Intelligence Group, reporting to AMD senior VP Vamsi Boppana. “Silo AI’s team of trusted AI experts and proven experience developing leadership AI models and solutions, including state-of-the-art LLMs [large language models] built on AMD platforms, will further accelerate our AI strategy and advance the build-out and rapid implementation of AI solutions for our global customers,” noted Boppana.

The move marks AMD’s third AI takeover in the past year or so. In August 2023 it announced the purchase of French AI software developer Mipsology for an undisclosed sum, and then two months later announced a deal to buy AI software specialist Nod.ai, again for an unrevealed amount. AMD says it has also invested more than $125m in a dozen AI companies during the past 12 months.

But while the deal to buy Silo AI looks like a very positive move and is clearly AMD’s most meaningful AI acquisition to date, it’s unlikely to put even a small dent in the AI technology sector market dominance currently enjoyed by Nvidia, according to experienced tech sector analyst Richard Windsor.

In his latest Radio Free Mobile blog, Windsor notes that while “AMD is building a vertically integrated AI toolkit based on its silicon, there are two elements still missing that will still prevent it from really taking the fight to Nvidia… First, it needs a ubiquitous development platform like [Nvidia’s] Cuda, and second, it needs to up its product cadence such that it is in the market with the same generation silicon as Nvidia at the same time.”

None of AMD’s AI acquisitions will help it achieve these goals but “crucially they lay the groundwork for AMD to build platforms and tools to compete with Cuda, Omniverse [another Nvidia development platform] and so on.”

But any impact will take years, reckons the analyst. While AMD is expecting AI chip revenues of $3.5bn this year, that will give it a market share of less than 3% due to Nvidia’s ongoing growth and current annual AI chip revenue run rate of about $100bn.

“This is why I think that AMD and everyone else for that matter has a massive hill to climb while the control point in the AI ecosystem remains at the level of the silicon development platform. Cuda is so mature and so universal that I think that all of its competitors are going to have a very hard time making a dent in its position,” adds Windsor.

But the analyst notes also that this might not always be the case “as there are signs that developers may shift from developing to silicon and switch over to using foundation models over time.” Check out Windsor’s blog to see the expected ramifications of that potential market trend.

That time looks quite a way off, but with the Silo AI acquisition AMD will soon, at least, be adding a respected and experienced AI development team and bringing on board some marquee customers as it strives to build its AI-related business and market share in the coming years.

- Ray Le Maistre, Editorial Director, TelecomTV