Key points:
- Nvidia has acquired the CEO and other staff of Enfabrica, a chip interconnect maker, and licensed its core technologies in a deal worth over $900 million.
- The acquisition is expected to help Nvidia build a unified, fault-resistant GPU cluster that can handle enormous workloads, particularly for generative AI.
- The deal is part of a broader trend in Silicon Valley where companies are using strategic acqui-hires to prioritize talent and intellectual property, potentially to sidestep regulatory scrutiny.
According to reports from CNBC and The Information, Nvidia has hired away the CEO and other staff of chip interconnect maker Enfabrica, and licensed its core technologies in a deal worth over $900 million. This move is seen as a strategic effort by Nvidia to address the challenge of building a unified, fault-resistant GPU cluster that can handle the enormous workloads required for generative AI. The demand for computing capacity to power generative AI is increasing rapidly, with companies like OpenAI, Anthropic, Mistral, AWS, Microsoft, and Google driving this growth.
Nvidia has been an investor in Enfabrica since September 2023, and analysts believe that the integration of Enfabrica’s technology is critical to increasing the efficiency of Nvidia’s clusters and making them capable of training the next frontier AI model. Enfabrica’s Accelerated Compute Fabric SuperNIC (ACF-S) silicon is designed to deliver higher bandwidth, greater resiliency, lower latency, and greater programmatic control to data center operators running data-intensive AI and HPC. This technology is expected to help Nvidia move data faster through its chip clusters, scale clusters beyond current network limits, and cut dependence on costly high-bandwidth memory (HBM).
Another Enfabrica technology that is of interest to Nvidia is the Elastic Memory Fabric System (EMFASYS), which provides AI servers with flexible access to memory bandwidth and capacity through a standalone device that connects over standard network ports. The combination of ACF-S and EMFASYS is expected to help Nvidia unlock higher GPU utilization rates and lower total cost of ownership, which are key metrics for hyperscalers and LLM developers operating at the cutting edge of AI.
The deal between Nvidia and Enfabrica is also part of a broader trend in Silicon Valley, where companies are using strategic acqui-hires to prioritize talent and intellectual property. This approach allows companies to acquire the talent and technology they need without the burden of integration baggage, and potentially sidestep regulatory scrutiny. Microsoft and Amazon have also made similar deals with Inflection AI and Adept, respectively. However, analysts warn that regulators are now attuned to such workarounds, and Nvidia’s play could easily attract attention.
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