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AMD Closes Record Chip Industry Deal with about $50-Bln Purchase of Xilinx

Staff members stand at a Xilinx Inc booth at the Mobile World Congress (MWC) in Shanghai, China February 23, 2021. REUTERS/Aly Song/File Photo
Staff members stand at a Xilinx Inc booth at the Mobile World Congress (MWC) in Shanghai, China February 23, 2021. REUTERS/Aly Song/File Photo
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AMD Closes Record Chip Industry Deal with about $50-Bln Purchase of Xilinx

Staff members stand at a Xilinx Inc booth at the Mobile World Congress (MWC) in Shanghai, China February 23, 2021. REUTERS/Aly Song/File Photo
Staff members stand at a Xilinx Inc booth at the Mobile World Congress (MWC) in Shanghai, China February 23, 2021. REUTERS/Aly Song/File Photo

Semiconductor designer Advanced Micro Devices Inc (AMD) said on Monday it has finalized the purchase of Xilinx Inc in a record chip industry deal valued at about $50 billion.

The closing of the deal comes on the heels of Nvidia Corp abandoning its plans to buy SoftBank-owned Arm Ltd, citing regulatory hurdles.

AMD's transaction moved ahead with all necessary approvals for the acquisition, it said.

The deal, announced in October 2020, was originally valued at $35 billion, but the rise of AMD stock has pushed up the price tag, according to AMD.

The purchase of Xilinx helps AMD "capture a larger share of the approximately $135 billion market opportunity we see across cloud, edge and intelligent devices," said AMD CEO Lisa Su in a statement.

The transaction comes as AMD intensifies its battle with Intel Corp in the data center chip market. The combined company will have over 15,000 engineers and a completely outsourced manufacturing strategy that relies heavily on Taiwan Semiconductor Manufacturing Co Ltd (TSMC).

The two US companies have benefited from a more nimble approach to grabbing market share from Intel, which has struggled with internal manufacturing.

AMD has long been Intel's chief rival for central processor units (CPUs) in the personal computer business.

AMD's Su will lead the combined company as chief executive, with Xilinx's CEO Victor Peng as president of the newly formed Adaptive and Embedded Computing Group.

The companies expect the deal to generate $300 million in cost savings.

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Perplexity AI Offers Google $34.5 Bn for Chrome Browser 

A logo is pictured at Google's European Engineering Center in Zurich, Switzerland July 19, 2018. (Reuters)
A logo is pictured at Google's European Engineering Center in Zurich, Switzerland July 19, 2018. (Reuters)
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Perplexity AI Offers Google $34.5 Bn for Chrome Browser 

A logo is pictured at Google's European Engineering Center in Zurich, Switzerland July 19, 2018. (Reuters)
A logo is pictured at Google's European Engineering Center in Zurich, Switzerland July 19, 2018. (Reuters)

Perplexity AI offered Google on Tuesday $34.5 billion for its popular Chrome web browser, which the internet giant could potentially be forced to sell as part of antitrust proceedings.

The whopping sum proposed in a letter of intent by Perplexity is nearly double the value of the startup, which was reportedly $18 billion in a recent funding round.

"This proposal is designed to satisfy an antitrust remedy in highest public interest by placing Chrome with a capable, independent operator focused on continuity, openness, and consumer protection," Perplexity chief executive Aravind Srinivas said in the letter, a copy of which was seen by AFP.

Google is awaiting US District Court Judge Amit Mehta's ruling on what "remedies" to impose, following a landmark decision last year that said the tech titan maintained an illegal monopoly in online search.

US government attorneys have called for Google to divest itself of the Chrome browser, contending that artificial intelligence is poised to ramp up the tech giant's dominance as the go-to window into the internet.

Google has urged Mehta to reject the divestment, and his decision is expected by the end of the month.

Google did not immediately respond to a request for comment.

Perplexity's offer vastly undervalues Chrome and "should not be taken seriously," Baird Equity Research analysts said in a note to investors.

Given that Perplexity already has a browser that competes with Chrome, the San Francisco-based startup could be trying to spark others to bid or "influence the pending decision" in the antitrust case, Baird analysts theorized.

"Either way, we believe Perplexity would view an independent Chrome -- or one no longer affiliated with Google -- as an advantage as it attempts to take browser share," Baird analysts told investors.

Google contends that the United States has gone way beyond the scope of the suit by recommending a spinoff of Chrome, and holding open the option to force a sale of its Android mobile operating system.

"Forcing the sale of Chrome or banning default agreements wouldn't foster competition," said Cato Institute senior fellow in technology policy Jennifer Huddleston.

"It would hobble innovation, hurt smaller players, and leave users with worse products."

Google attorney John Schmidtlein noted in court that more than 80 percent of Chrome users are outside the United States, meaning divestiture would have global ramifications.

"Any divested Chrome would be a shadow of the current Chrome," he contended.

"And once we are in that world, I don't see how you can say anybody is better off."

The potential of Chrome being weakened or spun off comes as rivals such as Microsoft, ChatGPT and Perplexity put generative artificial intelligence (AI) to work fetching information from the internet in response to user queries.

Google is among the tech companies investing heavily to be a leader in AI, and is weaving the technology into search and other online offerings.