AI Chips Race: Corp Dev Strategy of Nvidia and AMD

Nvidia’s been all over the news after they recently catapulted into the $2 trillion market cap club. 

After becoming the market leader in graphic cards, it seems that with the monopoly of high-performance chips that enable the deployment of GPT like models, the behemoth will take a leading position in the AI war too.

But it might not be easy. There exists another tech giant that’s foraying into this arena – Nvidia’s long time arch rival Advanced Micro Devices (AMD). Although it stood a distant second to Nvidia in the GPU market, it did a great job at providing optimized, entry level graphic cards that lowered the entry barrier for performance gaming. 

Turning back to the lucrative AI Race, AMD seems to have a trump card up its sleeve - strategic acquisitions. In this piece, we’ve analyzed the acquisition strategies of both Nvidia and AMD, present their notable acquisitions and finally, we use data to predict the top 10 companies that either company might acquire to expand their wings in AI.

Nvidia has done a solid job at diversifying its offering by making acquisitions across multiple sectors other than gaming & graphics. The acquisitions are generally Seed–Series C companies that have built and shipped on a massive scale and are ripe to become market leaders in their sectors.

AMD, unlike Nvidia, was focused mostly on acquiring hardware/semiconductor companies until its acquisition of an open source software company named Nod AI in October ’23. That marked the transition of AMD into the software side of things – something that would be very crucial in making gains in the AI Race.

Nvidia has made 17 acquisitions, but it was an announcement of a deal that fell through that caused the biggest stir. The company was planning to acquire the British semiconductor and advanced computing company ARM for $40 billion from Softbank Group (SBG). However, the deal fell through with the company citing significant regulatory challenges.

Nvidia now plans to invest in ARM’s IPO whenever the company goes public.

AMD has been an underdog in the game given Nvidia’s massive lead. But its safe to say that the company has placed some clever bets to make inroads into the AI industry.

You see, AMD had always been a hardware company that depended on other third-party sources to program their chips until they acquired Xilinx for $40 Billion in 2020.

Xilinx is not an AI company but here’s where things get interesting. Xilinx was the leader in manufacturing chips that could be reprogrammed even after being deployed in a computing system – which is an essential piece in solving the AI software development puzzle. More simply put, AMD aimed to lay the foundation of its full-stack AI capabilities, based on Xilinx’s software capabilities.

Now here comes the best part: We analyzed the last few acquisitions made by both Nvidia and AMD, studied the sectors that are trending, and predicted which companies are on a path to be potentially acquired by either of the 2 chip makers and tomorrow’s AI moguls.

We didn’t pull this prediction out of thin air! We dove into the Crustdata platform and screened for companies in certain specific sectors using our AI search. We found hundreds of companies (each with a minimum of 100 employees) that are post Series-B and ranked them based on their growth:

1. Founded in 2019, d-Matrix is an datacenter AI inference company with chiplet level interconnects. 

Probable Acquirer: Nvidia 

2. Beyond Limits is an advanced AI company that delivers industrial grade cognitive AI solutions.

Probable Acquirer: AMD

3. Nvidia partner, Modular is a next-generation AI developer platform that combines the development and deployment of AI.

Probable Acquirer: Nvidia 

4. Lambda, Inc. is a deep learning infrastructure company that provides computation to accelerate human progress using pre-configured machine learning frameworks.

Probable Acquirer: AMD  

5. Israel based Deci AI is a deep learning platform for developers to build and deploy ultra-fast models on any hardware. 

Probable Acquirer: AMD

6. Astera Labs is a semiconductor company that makes PCIe and ethernet based connectivity solutions to optimize cloud and AI infrastructure.

Probable Acquirer: Nvidia 

7. Lightmatter enables energy efficient computing with photonic processors for sustainable AI development.

Probable Acquirer: AMD

8. Quantum Machines is a start-up developing control and operation systems for quantum computers.

Probable Acquirer: AMD

9. Pi Datacenters is India’s 1st Greenfield data center that is a multi-cloud provider for enterprises.

Probable Acquirer: Nvidia

10. Weka is a cloud-native data platform that turns stagnant data silos into streaming data pipelines.

Probable Acquirer: Nvidia

With Nvidia having the early mover advantage and a dominating lead over its competitors, it might look obvious that Nvidia will lead AI development. But, AMD has made some gutsy moves to stay in competition too.

3 months ago, AMD released a chip (MI300) that has 2x transistors, 2.4x memory & 1.6x bandwidth compared to Nvidia’s best AI chip, H1000. So, there’s no clear winner yet but only time along with the best strategic moves will determine who’ll take home the AI belt.

About the data

The data seen above is from Crustdata - the most accurate headcount and founder data for private companies, pulled realtime. It indexes billions of public data points on companies every week to provide an edge over the private market.