AMD acquires networking technology startup Pensando for $1.9 billion

Semiconductor chip maker Advanced Micro Devices (AMD) announced it had reached a definitive agreement to acquire Pensando for approximately $1.9 billion before working capital and other adjustments.

Pensando’s products include a programmable packet processor that manages how workloads move through the hardware infrastructure, moving work off the CPU whenever possible to increase performance. The firm claims between 8x-13x better performance compared to competitive products from companies like Cisco, Nutanix, VMware, and others.

Lisa Su, Chairperson and CEO of AMD, said that the acquisition of Pensando was to help data center operators reduce the cost of ownership by using software to maximize efficiency.

Prem Jain, CEO and co-founder of Pensando, said that joining AMD would accelerate growth in Pensando’s core business, enabling the firm to pursue a more extensive customer base across more markets.

Under CEO Lisa Su, AMD has resurrected its data center chip business, where it’s the primary rival to Intel Corp. in manufacturing microprocessors that run the Internet and corporate networks. Su is adding new capabilities to AMD’s arsenal—graphics parts, programmable chips, and now data packet processing chips—to beef up the company’s product offering and satisfy the growing demand for machinery that controls and analyzes the Internet’s data.