Oracle strengthens its cloud capabilities with a $100 million investment in Ampere Computing’s chipsets.

In a move that aims to strengthen its cloud services and compete with industry giants like Amazon and Google, Oracle has agreed to acquire Ampere Computing, a leading provider of Custom Server Chips based on Arm technology. The deal, worth $100 million, includes a prepayment of $104.1 million for processor chips made by Ampere, as well as a $400 million investment in the company through a convertible note.

The investment in Ampere is part of Oracle’s strategy to bolster its cloud offerings and gain an advantage over competitors. By developing its own custom server chips, Oracle hopes to optimize its cloud infrastructure and provide more efficient and powerful solutions to its customers.

Ampere Computing has emerged as a strong player in the server chip market, challenging the dominance of Intel and Advanced Micro Devices (AMD) in the X86 design space. Its custom server chips, based on Arm technology, have gained recognition for their performance, power efficiency, and scalability. Ampere’s chips offer a compelling alternative to the established designs produced by Intel and AMD.

By investing in Ampere, Oracle demonstrates a significant commitment to this innovative technology. The company has already invested hundreds of millions of dollars in Ampere since its founding, indicating its belief in the potential of custom server chips to shape the future of cloud computing.

The geographical distribution of Oracle’s net sales is primarily focused on the United States, with a significant presence in the United Kingdom, Japan, Germany, Canada, and other countries. This global reach allows Oracle to leverage its investments in Ampere and expand its market share around the world.

Oracle’s investment in Ampere is part of its fiscal 2023 plan, which outlines the company’s strategic initiatives and goals for the coming years. By acquiring Ampere’s chipsets, Oracle aims to not only enhance its own cloud infrastructure but also position itself as a formidable competitor to Amazon and Google, both of which offer their own server chip solutions.

The deal between Oracle and Ampere is a significant milestone in the evolution of cloud computing. As companies increasingly rely on cloud-based services for their computing needs, the demand for advanced and efficient server chips is growing. By developing its own custom chips, Oracle is taking a bold step towards meeting this demand and ensuring that its cloud services remain at the forefront of innovation.

While Oracle has made significant investments in Ampere, the details of the deal remain undisclosed. Ampere declined to comment on the agreement, and Oracle has not responded to requests for comment. However, the investment of over $100 million on Ampere chips clearly demonstrates Oracle’s commitment to this technology and its potential to transform the cloud computing landscape.

As the leading business software publisher globally, Oracle’s net sales are divided into various categories, including software license support and cloud services, the sale of cloud and on-premise software licenses, the sale of equipment, and customer services. The acquisition of Ampere chipsets aligns with Oracle’s broader business strategy, which focuses on delivering comprehensive solutions to its customers and maintaining a competitive edge in the market.

By investing in Ampere, Oracle hopes to differentiate itself from its competitors and provide unique value to its customers. Custom server chips offer significant performance advantages over generic solutions, enabling companies to optimize their cloud infrastructure and deliver faster and more efficient services to their users. With the acquisition of Ampere chipsets, Oracle aims to leverage this technology to enhance its cloud offerings and establish itself as a leading provider of cloud services.

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