According to sources familiar with the matter, Intel is in preliminary talks to acquire SambaNova Systems Inc., an artificial intelligence chip startup.
Intel is in talks with SambaNova regarding acquisition terms
Intel is in talks with SambaNova about acquisition terms, according to sources familiar with the matter. SambaNova has previously worked with bankers to assess the interest of potential buyers.
The sources indicated that any deal could value SambaNova at less than the $5 billion valuation it received in its 2021 funding round. The sources requested anonymity due to confidentiality.
The sources said negotiations are in the early stages and an agreement is not yet certain. They also indicated that other buyers may emerge.
A SambaNova spokesperson said the company is always looking for strategic opportunities that support its mission and stakeholders, but declined to comment further.
An Intel representative also declined to comment. Previously, The Information reported that SambaNova was considering a sale.
About SambaNova
Founded in 2017 by Stanford University professors, one of whom was a MacArthur Genius Grant recipient, SambaNova designs custom AI chips aimed at competing with Nvidia's products. For Intel, acquiring SambaNova would give it access to a company very familiar to its CEO, Li-Wu Chen.
Intel CEO Li-Wu Chen previously served as executive chairman of SambaNova and later as chairman after joining Intel. His venture capital firm, Walden International, was one of the company's founding investors, leading a $56 million Series A funding round in 2018. In 2021, SoftBank Group led a $676 million funding round, valuing the startup at $5 billion.
Since then, the AI processor field has grown rapidly with the release of ChatGPT and the emergence of generative AI. With Nvidia dominating the chip market for training powerful AI models, SambaNova has shifted its focus to the inference domain - systems that run already developed models.
SambaNova has also begun to focus on inference on its own hardware and offers its products in both cloud services and on-premises solutions. In April of this year, the company laid off approximately 15% of its workforce.
Previously: SambaNova is seeking a sale
In the fiercely competitive AI hardware space, Palo Alto-based startup SambaNova Systems, once hailed as a strong challenger to Nvidia's dominance, is now quietly seeking a sale due to funding difficulties. According to The Information, the company's repeated failures to secure funding have prompted executives to consider other strategic options, including a potential acquisition. Valued at $5 billion in its last funding round in 2021, SambaNova has been developing dedicated chips for efficient AI inference and training, aiming to become a provider of enterprise-grade solutions in an increasingly competitive emerging enterprise market.
This move comes at a time when investor enthusiasm for AI infrastructure is cooling, with venture capitalists demanding clearer profit paths from companies. SambaNova's challenges reflect broader pressures facing AI chip companies, many of which have exhausted significant funds trying to scale up following the surge in computing power demand after the release of ChatGPT. As detailed in the same report by The Information, the startup had planned to raise hundreds of millions of dollars, but its market appeal and competitive edge against giants like Nvidia and AMD have been heavily questioned.
SambaNova's journey began with a promising start. Founded in 2017 by former Oracle executives Rodrigo Liang and Kunle Olukotun, along with Stanford professor Christopher Ré, the company quickly attracted the attention of numerous blue-chip investors. According to Reuters, in 2021, SambaNova raised $676 million in a funding round led by SoftBank Vision Fund 2, pushing its valuation above $5 billion and briefly making it the world's highest-funded AI startup. This funding fueled the development of its Reconfigurable Dataflow Unit (RDBMU) chip, which promises faster processing speeds for large language models without sacrificing the energy efficiency of traditional GPUs.
Recently, SambaNova has shifted towards bundled hardware and software sales, including subscription services for generative AI models. A TechCrunch article in early 2024 highlighted its Samba-1, a finely tuned model designed to serve enterprise customers seeking customized AI solutions. However, despite the company launching some innovative products, such as a chip capable of handling 5 trillion parameter models (detailed in a 2023 TechCrunch article), its product adoption has lagged behind expectations, exacerbated by economic headwinds.
Industry insiders believe that SambaNova's move to sell could attract interest from established tech companies eager to acquire AI talent and intellectual property. Potential acquirers could include hyperscale cloud providers like Google or Amazon, which have been acquiring specialized hardware companies to enhance their cloud capabilities. A report in *The Information* notes that while a formal sale process has not yet begun, informal talks are underway, highlighting the startup's urgency to find a way out before its cash reserves dwindle further.
This is not an isolated case; the AI chip sector has experienced a wave of consolidation and transformation. For example, a 2023 Vision Fund report explored how SambaNova adapted to industry changes after ChatGPT, emphasizing the importance of scalable inference platforms. However, according to SemiEngineering, global chip funding will reach $6 billion in the third quarter of 2025 alone, with only the most differentiated companies thriving, while companies like SambaNova are in dire straits.
Looking ahead, a sale might preserve SambaNova's technology and potentially integrate it into a larger ecosystem, accelerating enterprise AI deployments. Just days ago, HPCwire announced collaborations with autonomous AI clouds in Australia and Europe, demonstrating the technology's continued importance. However, the funding stagnation highlights the risks of over-reliance on venture capital in a capital-intensive sector with long hardware development cycles.
For industry insiders, SambaNova's predicament serves as a warning that even well-funded AI companies are vulnerable. According to Business Insider, with competitors like Groq and Positron poised to challenge Nvidia by 2025, the pressure on companies to achieve tangible returns is mounting. Whether through acquisition or a last-minute funding breakthrough, SambaNova's next step will test the resilience of dedicated AI hardware in an era of industry consolidation.
Source: Content compiled from Bloomberg
