Oracle Corp agreed to prepay $104.1 million for processor chips made by startup Ampere Computing and invested $400 million in the company through a convertible note in its fiscal 2023, the software maker said on Friday. The upfront payment and investment are part of the tech giant’s strategy to strengthen its cloud capabilities as it competes with companies like Amazon and Google in the hardware space.
Ampere’s server chips are designed to solve a fundamental problem large cloud service provider’s face. Because of rising power prices, these firms want to provide their customers with high-performance hardware that is also as energy-efficient as possible. But Intel’s X86 server processors are typically too big and inefficient for that goal. Ampere’s new chips, dubbed AmpereOne, are intended to address this issue.
The company’s chips feature 192 cores, much more than Intel’s dozens. Ampere says this is the highest core count available in a commercial chip. The cores are the brains of the servers that run a wide range of online applications, from business software to social media websites.
In addition to boosting performance, the new chips are designed to consume less power than Intel’s more advanced X86 designs. This should help reduce operating expenses at cloud service providers, which can account for up to a third of a business’s total spending.
The new chips also offer a more flexible memory architecture, making it easier for companies to add storage and other features as needed. That flexibility is essential in lowering operating expenses because many data center providers spend a lot of money on adding memory as their operations expand.
Ampere’s new chips are based on the Arm technology used in smartphones and other mobile devices and emphasize energy efficiency. They compete with designs produced by Intel and Advanced Micro Devices (AMD.O), which use a similar technology known as X86.
According to the company, the companies adopting Ampere’s chips are Amazon Web Services, Google Cloud, Hewlett Packard Enterprise (HPE.O), Tencent Cloud, and Baidu. Its founder, Renee James, previously ran Intel’s data center business and set up Ampere after realizing that Intel X86 chips weren’t suitable for cloud workloads.
Geetha Ram, who heads telco computing at Hewlett Packard, always deals with Intel processors in her role running one of the world’s most giant server farms. But she is enthusiastic about the prospects for Ampere, which is offering a chip alternative to Intel’s X86 architecture. The company’s chips are based on the same designs that underpin most smartphone processors and are lauded for their energy efficiency compared to X86. Hewlett Packard will start using the company’s new Altra v2 CPU chips in its HPE Cloud CS-Series virtual machine instances, the company said on Thursday. This will allow them to run more data and workloads while saving power by up to 65%, the company said.
