Intel has made a significant move by signing a term sheet to acquire SambaNova Systems, an AI chip startup. Sources familiar with the deal have confirmed this development, although the specific details remain undisclosed. Worth noting, this term sheet is nonbinding, indicating that the acquisition is not yet finalized and may be dissolved without penalty. It could take weeks or even months for the necessary regulatory approvals and financial assessments to be completed.
Originally, Intel’s interest in SambaNova was reported by Bloomberg in late October, with early discussions indicating that the startup may sell for less than its previous $5 billion valuation as of April 2021.
A key point of intrigue is that Intel CEO Lip-Bu Tan also chairs SambaNova Systems. In addition, Intel Capital has invested in SambaNova and is currently undergoing a spin-off into a standalone fund. Another investor, Japan’s SoftBank Group, significantly invested in Intel earlier this year.
SambaNova Systems, established in 2017 by Stanford professors Kunle Olukotun and Christopher Ré, along with executive Rodrigo Liang, specializes in an AI chip platform focused on inference computing. The startup had previously raised a total of $1.14 billion in funding, including a major investment round led by SoftBank that raised its valuation to $5 billion.
However, recent reports indicate a decline in SambaNova’s valuation, with BlackRock reportedly reducing its share value by 17% over the past year. This decline may have made the startup appealing to Intel, especially as the tech giant has not kept pace with the AI chip advancements of competitors.
Under CEO Tan’s leadership, Intel aims to address its debts, divest noncore assets, and prioritize AI technologies. Additionally, a substantial capital infusion of $8.9 billion from the US government in August will be directed towards expanding domestic semiconductor manufacturing capabilities.
