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SoftBank Weighs Stake in Ampere, Valuing Chipmaker at $8 Billion

·2-min read
SoftBank Weighs Stake in Ampere, Valuing Chipmaker at $8 Billion

(Bloomberg) -- SoftBank Group Corp. has held talks with Ampere Computing LLC about investing in the maker of server-computer processors, an attempt to diversify its bet on the booming chip sector, according to people familiar with the situation.Ampere has held similar talks with multiple would-be investors, but doesn’t currently need to raise money, according to one of the people, who asked not to be identified because the discussions were private. SoftBank has offered hundreds of millions of dollars for a stake that would value Ampere at more than $8 billion. Ampere is a 4-year-old startup run by former Intel Corp. executive Renee James, who is trying to break into a market dominated by her old company: microprocessors that run servers in giant data centers -- the backbone of the internet. Early investors in Santa Clara, California-based Ampere include Oracle Corp., the world’s second-largest software maker.

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Representatives for Ampere and SoftBank declined to comment.

James’s company, which uses chip technology licensed from SoftBank unit Arm Ltd., has said its customers include Microsoft Corp. and Tencent Holdings Ltd., and TikTok’s Chinese parent company, ByteDance Ltd. The startup is moving deeper into designing its own chips in new products that will come next year. For Japan’s SoftBank, backing Ampere would represent a fresh bet on semiconductors at a time when it’s trying to unload another big chip investment. SoftBank has agreed to sell Arm to Nvidia Corp., though that deal faces regulatory hurdles.

Ampere and Amazon.com Inc.’s AWS are leading the push to bring Arm technology, which is pervasive in smartphone silicon, to more powerful computer systems.

Chip demand surged during the pandemic, partly because the work-from-home shift required an investment in new technology. It’s been a particular boon for Ampere: The company’s processors are designed to help deliver more computing services over the internet.

Intel once enjoyed a market share of 99% in the market where Ampere and others are making inroads. But the chipmaker has struggled with its production technology in recent years, and contractors such as Taiwan Semiconductor Manufacturing Co. have been able to offer production that’s just as good or better.

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