Mark Zuckerberg's Meta Eyes Acquisition Of Korean AI Chip Startup Founded By Former Samsung And AMD Engineer

Meta Platforms Inc. META is reportedly in negotiations to acquire FuriosaAI Inc., a Seoul-based AI chip startup. The acquisition deal is expected to be finalized as early as this month.

What Happened: Mark Zuckerberg‘s Meta is in discussions to acquire FuriosaAI, a South Korean AI chip startup founded by June Paik, a former Samsung SSNLFand Advanced Micro Devices AMD engineer, according to a Forbes report on Tuesday. FuriosaAI specializes in developing accelerators that optimize AI applications and has created its own AI chip, Warboy in 2021, after which it launched the advanced accelerator chip RNGD in August.

“RNGD will be an ideal choice for the large-scale deployment of advanced generative AI models such as Meta’s Llama 2 and Llama 3,” stated FuriosaAI.

CEO Paik has previously highlighted the need for an alternative semiconductor ecosystem, citing the high cost and limited supply of Nvidia’s AI accelerators. FuriosaAI’s models reportedly offer a more cost-effective solution, with system chip construction costs amounting to about half of Nvidia’s.

SEE ALSO: Sam Altman’s OpenAI Set To Finalize In-House AI Chip, Reducing Dependence On Nvidia: Report

Why It Matters: This move by the Zuckerberg-led company comes in the wake of aggressive AI initiatives that have been driving the company’s growth. According to Wedbush analyst Dan Ives, Meta’s AI-driven monetization strategy could potentially add an incremental $100 per share.

The acquisition talks are also happening at a time when Meta Platforms is looking to challenge Nvidia Corp NVDA and lessen its strong dependence on the world’s leading GPU manufacturer for AI chips. Last month, Meta revealed that its capital expenditures could reach up to $65 billion in 2025, with a substantial share dedicated to AI infrastructure investments.

Conrad van Tienhoven, a portfolio manager at Riverpark Capital told Bloomberg, “I have long viewed Meta as the biggest beneficiary of AI outside of maybe Nvidia, and I think more people are coming around to that idea.” Tienhoven elucidated that Meta’s investment has reshaped its approach to ad targeting and measurement, leading to enhanced growth and increased average revenue per user.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.