Advanced Micro Devices, Inc. (NASDAQ:AMD) said it is to buy cloud start-up Pensando for US$1.9bn in cash to compete with Intel and Nvidia in the data-centre chipset market.
The deal gives AMD access to Pensando's processor and software platform which allows companies to function more like cloud computing data centres.
The platform is used by companies such as Microsoft Corporation (NASDAQ:MSFT), International Business Machines Corp. (NYSE:IBM) (International Business Machines Corp. (NYSE:IBM)), Oracle Corporation (NYSE:ORCL) (Oracle Corporation (NYSE:ORCL)), Hewlett Packard Enterprise Co (NYSE:HPE) (Hewlett Packard Enterprise Co (NYSE:HPE)) and Goldman Sachs (NYSE:GS) (Goldman Sachs (NYSE:GS)).
AMD expects the deal to close by July.
Pensando CEO Prem Jain will join AMD's data centre unit when the deal competes.
"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 Lisa Su, AMD's chair and chief executive, in a statement
"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."
Founded by former Cisco engineers, Pensando makes edge computing technology that competes with Amazon.com Inc's (NASDAQ:AMZN) Nitro service, Intel's data processing units, and NVIDIA's BlueField.