AMD will acquire cloud startup Pensando for US$1.9 billion (S$2.6 billion) to bolster its data centre products and capitalise on booming demand from cloud and enterprise sectors.
AMD said the deal value does not include working capital and other adjustments.
Pensando, which was founded in 2017 by a group of four ex-Cisco Systems engineers, counts Goldman Sachs and Microsoft's cloud unit Azure as its customers.
The startup makes a fully programmable processor and a software platform, which helps enterprise clients and data centre customers to function more like cloud computing data centers like AWS.
The lucrative data centre chip business is rife with competition, with AMD rivals Intel and Nvidia.
Pensando's chief executive Prem Jain and the entire team will join AMD's Data Centre Solutions Group.