Ampere Computing, a datacenter CPU designer backed by Oracle, is considering a sale as it faces increasing competition and uncertain prospects for an initial public offering (IPO). The company is weighing its strategic options and working with a financial adviser to explore a potential buyout, reports Bloomberg.
The decision to explore a sale indicates that Ampere may not see a straightforward path to an initial public offering amid increased competition from AMD, Intel, and even Arm itself (which now offers building blocks for datacenter-grade CPUs) despite the surge in demand for AI-related machines. While an IPO in the near term does not seem like the right idea for Ampere at present, the company remains open to the possibility of an IPO in the future, according to Bloomberg.
Ampere was founded in 2018 by Renee James, a former Intel executive, with a plan to develop multi-core Arm-based processors for cloud datacenters and exascalers, such as Oracle, AWS, Microsoft, and Google. In fact, Oracle has made strategic investments in Ampere, and while the company has also raised funding from other investors, including private equity firms Carlyle Group and Softbank, Oracle remains its primary financial and strategic backer. Also, Renee James is on Oracle's board of directors.
Ampere has introduced Ampere Altra and Ampere Altra Max CPUs with up to 128 cores in 2020, AmpereOne processors with up to 192 cores in 2023, and then with up to 256 cores in 2024. These CPUs (except the 256-core model) have been adopted by Oracle for its Oracle Cloud Infrastructure (OCI). Multiple other cloud companies, including Google and Microsoft also use the processors. More recently the firm even added a 512-core AmpereOne Aurora CPU to the roadmap.
However, now that AMD has 192-core x86 CPUs and Intel has 244-core x86 processors, prospects of Ampere's Arm-powered datacenter-grade CPUs do not look that bright. Still, Ampere remains confident in its long-term prospects, believing that its energy-efficient chips will offer a competitive advantage as datacenters face increasing power demands, reports Bloomberg.
Ampere was valued at $8 billion following a proposed investment from SoftBank and then confidentially filed for an IPO in 2022. But now that the market conditions have changed, the company appears to be re-evaluating its strategy.
Oracle, which has a significant stake in Ampere, will likely play a key role in the company's future. Oracle's cloud computing business heavily uses Ampere's CPUs, making it an important customer. Oracle could also be a potential buyer for Ampere. However, given the fact that in the past it abandoned the development of proprietary Sun UltraSPARC processors (after it took over Sun Microsystems in 2009 - 2010) and favored industry-standard Intel Xeon, it does not look like it is interested in developing CPUs in-house.
While Ampere's Arm-based Altra offerings seem to be more competitive than UltraSPARC processors were back in 2010, Oracle might prefer to keep away from CPU development to maintain its relationships with AMD, Intel, and Nvidia, which products power some of its most sophisticated AI and HPC instances. Just last week Oracle announced a Zettascale cluster for AI comprising of 131,072 Nvidia B200 (Blackwell-based) GPUs that can offer performance of around 2.4 FP4 ZettaFLOPS.
