AMD strengthens its software strategy with Nod.ai acquisition

AMD announced on Tuesday that it will acquire Nod.ai, an artificial intelligence startup that specializes in making AI models run better on AMD’s chips.

The deal is part of AMD’s strategy to compete with Nvidia (NVDA.O), the dominant player in the AI chip market. Nvidia has a strong advantage in the software side of AI, as it has developed a comprehensive software stack and a large developer community for its chips.

AMD aims to close the gap by investing in and building a unified software platform for its various chips.

“That is our strategy, and we are executing on it,” AMD president Victor Peng told Reuters. “We are doing it both organically and through acquisitions.”

Nod.ai fits into AMD’s strategy because it helps customers deploy AI models that are optimized for AMD’s chips more easily. Nod.ai’s technology is used by large data center operators, among others.

AMD did not reveal the terms of the deal. Nod.ai, based in Santa Clara, California, has raised about $36.5 million, according to PitchBook data.

Earlier this year, AMD created the AI group that will integrate Nod.ai, Peng said. The group has about 1,500 engineers – mostly software related – and AMD plans to grow the team with 300 more hires this year, and more in 2024.

“We have been growing fast, and we have plans for next year as well,” Vamsi Boppana, senior vice president, Artificial Intelligence Group at AMD said.

The Nod.ai acquisition is AMD’s second in the past few months, Peng said. When asked if AMD planned to make more acquisitions, Peng said, “We are always looking.”