Last year, it was reported that Ampere, an AI chip design company backed by Oracle co-founder Larry Ellison, was exploring a potential sale. Ampere has been collaborating with a financial advisory firm to gauge interest in a possible acquisition, possibly initiating discussions with major industry players.
Recent media reports suggest that Arm is considering acquiring Ampere and is assessing several strategic options, including a comprehensive acquisition or alternative collaborative ventures. Arm aims to bolster its position in the rapidly expanding cloud computing infrastructure market by either acquiring or partnering with Ampere. Currently, both companies are in preliminary discussions, and no specific acquisition or collaboration strategies have been finalized.
In recent years, Ampere has concentrated on pioneering technologies designed for a variety of cloud workloads and infrastructures that integrate artificial intelligence (AI) computing. Despite benefiting from the ongoing AI boom and experiencing significant growth, including plans for an initial public offering (IPO), Ampere has started re-evaluating its growth strategy due to increased competition and the surge of similar chip offerings in the market. Alongside an IPO and sale, Ampere is also open to other possibilities and may opt to remain independent going forward.
Some analysts suggest that Arm's potential acquisition of Ampere is part of a wider strategy to diversify its revenue streams and enhance its presence in the profitable data center market. Although Arm is a leader in the mobile and embedded chip markets, the data center arena is still dominated by the x86 architecture. Ampere’s focus on Arm-based chips aligns with Arm’s ambitions in the server market.
While the acquisition could create strategic synergies, it also presents challenges regarding Arm's ability to navigate regulatory and competitive pressures. As a neutral licensee of various custom chip designs, acquiring Ampere might lead to potential conflicts of interest with other chip manufacturers in the server market that utilize Arm’s architecture.