AMD is set to acquire Pensando Systems as it solidifies its product lineup, especially across its data center offerings. AMD has been rapidly catching up to rivals in the last two years and exhibits no signs of slowing down, whether in terms of hardware innovation or its ability to fulfill soaring market demands.
American chipmaker AMD has announced its intent and a definitive agreement to acquire Pensando Systems to augment its position in the data center space. The deal, valued at $1.9 billion, doesn’t account for working capital and other adjustments.
Pensando is a California-based company involved in optimizing cloud infrastructure. The company, which also has an office in Bangalore, India, provides programmable processors for data centers to maximize efficiency.
Whether on-premise or for cloud computing, the ubiquity of chips, including those by AMD, is at an all-time high and slated to increase further. AMD even doubled its revenueOpens a new window year-over-year in 2021 from data center products such as EPYC processors and Instinct accelerators, driven by growing demands and adoption by cloud and enterprise customers.
After breaching the 10% mark last year in Q1, AMD now commands an 18.3% shareOpens a new window of the data center market.
AMD primarily competes with Intel’s Xeon Scalable CPUs and NVIDIA/s data center GPUs in enterprise and cloud computing. Both Intel and NVIDIA recently unveiled data center/server plans. Intel’s third-gen Xeon processors, dubbed Ice Lake (10 nm) and Sapphire Rapids (Intel 7), are scheduled for release later in 2022, as announced at the Intel Investor Meeting 2022.
Intel will also launch Emerald Rapids in 2023 (Intel 7) and Sierra Forest and Granite Rapids in 2024 (both based on Intel 3). Meanwhile, NVIDIA launched the H100 GPU based on the new NVIDIA Hopper Architecture at its annual 2022 GPU Technology Conference and the Grace CPU Superchip based on Arm Neoverse.
With Pensando’s expertise, tech, software stack, and programmable packet processors, AMD will hope to shore up its data center products’ performance, scale, and flexibility.
The company said that Pensando’s solutions would help increase the performance of AMD products between 8x and 13x. How? Well, Pensando’s programmable packet processor in its scalable distributed services platform has capabilities to route data in a server. It can “accelerate multiple infrastructure services simultaneously, offloading workloads from the CPU and increasing overall system performance.â€
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AMD’s host of products, such as GPUs, CPUs, adaptive computing engines, and field-programmable gate arrays (FPGA), will supplement the Santa Clara-based company’s ability to cater to increasing demands for multiple workloads with unique requirements. On the other hand, being a part of AMD should allow Pensando to expand its global customer base.
“To build a leading-edge data center with the best performance, security, flexibility and lowest total cost of ownership requires a wide range of compute engines,†said Dr. Lisa Su, AMD chair and CEO.
“Today, with our acquisition of Pensando, we add a leading distributed services platform to our high-performance CPU, GPU, FPGA and adaptive SoC portfolio. The Pensando team brings world-class expertise and a proven track record of innovation at the chip, software and platform level which expands our ability to offer leadership solutions for our cloud, enterprise and edge customers,†Su added.
Founded in 2017 by four engineers formerly from Cisco, Pensando emerged from stealth in 2019. So far, the company has raised a total of $313 millionOpens a new window through its funding rounds, the latest being the $35 million Series C in August 2021. Its cloud and enterprise deployments are leveraged by Goldman Sachs, IBM Cloud, Microsoft Azure and Oracle Cloud.
The four co-founders, viz., Mario MazzolaOpens a new window , Luca CafieroOpens a new window , Prem JainOpens a new window (CEO), and Soni JiandaniOpens a new window (Chief Business Officer), are known more commonly as MLPS. MLPS also happens to stand for Multiprotocol Label Switching, a data forwarding and routing technology that increases the speed and controls the flow of network traffic.
Former Cisco CEO John ChambersOpens a new window , who currently heads JC2 Ventures as the CEO, also serves as the board chair at Pensando. “Pensando is built upon strong customer relationships and a solution that is at least two years ahead in cloud, edge and enterprise,†Chambers said. “Pensando’s smart switching architecture has 100x the scale, 10x the performance at one-third the cost of ownership of any comparable products in the enterprise market.â€
“Industry leadership is based on catching business model disruptions enabled by new technologies,†he added. “Pensando’s leadership position in software-defined cloud, compute, networking, security and storage services as part of the much larger AMD portfolio is in my opinion a perfect fit to shape the data center computing landscape for the next decade.â€
AMD’s acquisition of Pensando Systems is expected to close in Q2 2022 and is subject to satisfactory closing conditions and approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
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