Startup chip designer Ampere Computing recently filed for an initial public offering (IPO). The company was founded in 2017 but is experiencing rapid growth as data center operators adopt its cloud-native processors. Founded and led by Silicon Valley native Renée James, this is an exciting computing technologist to follow closely ahead of its public debut.
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Ampere Computing could be a really big deal
Ampere Computing was founded in late 2017 by Renée James, who also serves as the company's CEO. James was an early believer that the data center would be a primary computing unit as cloud services were dawning 20 years ago. Ampere was started to address this specific market.
The company designs chips based on an architecture licensed from ARM Holdings (the company Nvidia (NVDA 3.65%) was attempting to acquire last year) -- specifically, processors that are "cloud-native."
Ampere announced its 128-core data center processor (more cores means a CPU can handle more tasks, which makes it more efficient) back in 2020. That's a notable achievement.
Advanced Micro Devices' (AMD 2.44%) EPYC Zen4 "Bergamo" will have up to 128 cores and will be available later in 2022. Intel (INTC -0.38%) has yet to reveal when its 128-core data center CPUs will come out. NVIDIA just announced its Grace CPU with up to 144 cores, but it pulls it off by pairing two Grace CPUs to create a "superchip."
Sounds cool, but why is this important? Data centers are the foundation for all things cloud computing -- be it a basic app used on your smartphone or a work service you access via an internet connection. AI software is being put to work at the data center level too, and before long, most apps will likely have at least some basic AI functionality built-in.
That's where Ampere's processors come in. While it encompasses more than just processors, Intel's Data Center Group hauled in $25.8 billion in sales in 2021. Likewise, AMD's Enterprise, Embedded and Semi-Custom segment brought in nearly $7.1 billion in revenue last year.
Suffice to say, Ampere could be a big deal, given the large and fast-growing market it plays in. Early customers include Oracle, Microsoft Azure, and China's Tencent Cloud.
Deep roots in cloud computing
Thus far, we know little about Ampere's financials until the company files its prospectus with the SEC. Stay tuned for details on that.
But here's what we do know: In its short history, Ampere has raised some $426 million in investment funding, most of it from Oracle. ARM Holdings also invested during a venture capital raise led by private equity firm The Carlyle Group a few years ago.
Founder and CEO James has an impressive resume. She is on the board of directors at Oracle and Citigroup and is an operating executive at Carlyle Group. Prior to that, James was at Intel for 28 years, last serving as President of the chip giant.
In an interview on Fortt Knox last year, James talked about her time as COO of Intel's Online Services segment in the late 1990s and early 2000s. This was Intel's early data center services business when cloud computing was still more of a concept than a fully fleshed-out business model. The idea was "prescient, but a decade too soon." Intel ended up closing the unit in the aftermath of the dot-com era.
Fast forward to today, the cloud is in its prime days of growth and expansion. Cloud services and AI are proliferating. Even smaller businesses are bringing high-end servers into their private data centers to run complex computing tasks. There are looming challenges, though.
According to James in the same interview mentioned above, semiconductors are "the most challenging ... cheap thing in the world." They are incredibly complex to design and produce, and customers want lots of them at a low price, but the costs to make them are going up.
Plus, as computing power increases, energy consumption also rises, so the semiconductor industry will need to grapple with engineering circuitry with lower power requirements in the years ahead as data centers grow in use and complexity.
This likely explains the IPO filing. Though it's reportedly growing fast, Ampere is probably still a very small company at this stage. It's going to need cash to keep designing powerful but efficient chips for the cloud. And it appears to have sprung ahead of its competition, but semiconductor design demands never-ending innovation to stay ahead of the pack.
I have my eye out for Ampere Computing's prospectus (usually filed as an S-1 with the SEC) ahead of its IPO. There's still a lot to learn, but Renée James' upstart computing company has my attention.
