(Reuters) – Oracle Corp has agreed to prepay $104.1 million for processor chips manufactured by startup Ampere Computing, as stated in Oracle’s proxy statement filed on Friday. This prepayment is in addition to the $400 million investment Oracle made in Ampere through a convertible note in its fiscal year of 2023, according to the proxy statement.
Ampere Computing specializes in developing custom server chips based on Arm technology, which directly compete with Intel and Advanced Micro Devices’ X86 designs. Oracle has been investing hundreds of millions of dollars in Ampere since its inception, as revealed through regulatory filings.
The objective behind Oracle’s investment in Ampere and its chip purchases is to forge a competitive edge for Oracle’s cloud service, positioning it favorably against rival companies. For instance, Amazon.com manufactures its own server chips that rival Ampere’s offerings, and Google has developed its own artificial intelligence processors.
When approached for comment, Ampere declined to provide any details, while Oracle did not respond to the request for comment.
Oracle’s investment in Ampere demonstrates its commitment to improving the performance and capabilities of its cloud infrastructure. By investing in cutting-edge technology like Ampere’s chips, Oracle aims to stay ahead of its competitors in the increasingly competitive cloud market.
According to industry experts, custom server chips offer several advantages over their counterparts. They are designed with specific workloads in mind, resulting in optimized performance and energy efficiency. This aligns with Oracle’s long-term strategy of providing high-performance cloud solutions to its customers.
This strategic partnership between Oracle and Ampere has the potential to disrupt the market, given Oracle’s expansive customer base and Ampere’s innovative chip design. As more businesses transition to cloud computing, the demand for efficient and powerful server chips is expected to grow substantially.
With Oracle’s substantial investment in Ampere, it will be fascinating to see how this collaboration unfolds and how it impacts the cloud market as a whole.
Reporting by Max A. Cherney in San Francisco; Editing by David Gregorio and Rosalba O’Brien
Credit: The Star : Tech Feed
