AMD announces acquisition of Finnish AI start-up Silo AI for $665 million. This acquisition is one of the largest of its kind in Europe and aims to expand AMD's AI services and challenge Nvidia's market leadership. The California-based chip manufacturer plans to leverage Silo AI's entire team and software tools to develop custom large language models (LLMs).

The acquisition is expected to be completed in the second half of 2024, subject to regulatory approvals. According to Vamsi Boppana, Senior Vice President of AMD's AI Group, the agreement will help AMD accelerate both customer engagements and its own AI technology.

This transaction is the largest acquisition of a privately held AI start-up in Europe since Google's purchase of DeepMind in 2014. The acquisition comes at a time when takeovers by Silicon Valley companies are being increasingly scrutinized by regulators in Brussels and the UK.

Silo AI, one of Europe's largest private AI labs, offers tailored AI models and platforms for enterprise clients. Last year, the company launched an initiative to develop LLMs in European languages such as Swedish, Icelandic, and Danish.

AMD is in competition with Nvidia, which holds the largest market share in the high-performance chip sector. Nvidia has achieved its success through massive investments in its proprietary software Cuda, which was originally developed for processing computer graphics and video games but now supports a wide range of applications.

Peter Sarlin, co-founder and CEO of Silo AI, described the acquisition as "the logical next step" on the path to becoming a "flagship" AI firm. Silo AI is committed to the open-source philosophy and offers AI models for free, in contrast to proprietary models from companies like OpenAI and Google.

The acquisition demonstrates AMD's efforts to rapidly scale its business and strengthen customer loyalty through proprietary offerings. AMD sees Silo AI as a link between its core AI software and the practical applications of the technology.

Software has become a new battleground for semiconductor companies as they try to lock in customers to their hardware and generate predictable revenue, regardless of the economic fluctuations in the chip market. Nvidia now offers over 600 'pretrained' models that are easier for customers to implement.

This strategic acquisition represents a significant step for AMD to remain competitive in the race for AI innovations and services and to gain market share from dominant players like Nvidia.