According to a report from Bloomberg, Arm and its parent company, SoftBank, are exploring strategic options to acquire Ampere Computing, a prominent company in server chip design based on Arm architecture. If this move materializes, it would further consolidate Arm’s presence in the growing data center chip market.
A Story of Interest and Previous Negotiations
SoftBank expressed interest in acquiring Ampere in 2021. However, the release of documents related to Ampere’s initial public offering (IPO) in 2022 revealed significant investment from Oracle in the company, initially amounting to $426 million. This led SoftBank to halt its acquisition plans.
Since then, Oracle has increased its investment in Ampere, including $600 million in convertible debt during the fiscal year that ended on May 31, 2024, and $400 million in fiscal year 2023. Currently, Oracle owns 29% of Ampere, as announced in September 2024. Oracle’s convertible debt is set to mature in January 2026.
In the same month, reports indicated that Ampere was working with a financial advisor to explore sale options, reigniting speculation about possible interest from Arm and SoftBank in acquiring the company.
Ampere: A Key Player in Server Chip Design
Founded in 2017 by Renée James, a former Intel executive, Ampere has established itself as a leader in server chip design based on Arm architecture. Initially, Ampere used Arm’s Neoverse designs, but it recently launched its Ampere One range, which features internally developed Arm cores. This shift to in-house designs reflects Ampere’s capability to compete in an increasingly competitive and demanding market.
Ampere’s chips have gained popularity among data center operators due to their energy efficiency and performance, characteristics that meet the growing needs of cloud computing environments.
Implications of the Potential Acquisition
If realized, Arm and SoftBank’s acquisition of Ampere would have a significant impact on the tech industry. Key potential benefits include:
- Strengthening the Arm Ecosystem: The acquisition would allow Arm to solidify its position as the leading provider of data center technologies at a time when its architecture continues to gain ground against Intel’s x86.
- Expansion of Design Capabilities: With the integration of Ampere’s teams, Arm could accelerate the development of new customized solutions for data centers and other high-demand applications.
- Oracle’s Influence: Given its substantial stake in Ampere, Oracle could play a crucial role in any future negotiations. Its position as a strategic investor and key customer adds complexity to the acquisition process.
A Transforming Market
The Arm architecture has gained prominence in recent years, especially in the data center realm. Companies like Amazon Web Services (AWS) have embraced Arm-based chips for their infrastructures, highlighting the increasing relevance of this technology in the global market.
With the acquisition of Ampere, Arm and SoftBank would not only strengthen their ability to compete in this sector but also consolidate their long-term strategic vision for the development of advanced technologies for cloud computing.
For now, neither Arm, Ampere, nor SoftBank has issued official comments on these reports. However, the industry remains attentive to the upcoming moves that could redefine the server chip landscape.
via: DCD