Oracle Owns Nearly A Third Of Arm Chip House Ampere, Could Take Control In 2027

Oracle could choose to take control of Ampere Computing, the Arm processor designer it has backed and uses in its cloud.

A proxy statement [PDF] filed on Wednesday reveals that Oracle held 29 percent stake in Ampere as of May 31, 2024, and has the option to gain majority control over the chip house in 2027.

"The total carrying value of our investments in Ampere, after accounting for losses under the equity method of accounting, was $1.5 billion as of May 31, 2024," the filing reads.

Oracle also revealed it extended $600 million in loans in the form of convertible debt to Ampere during its 2024 fiscal year, on top of $400 million in debt given during the prior fiscal year.

Ampere's debts are set to mature beginning June 2026, when Oracle will have the option of converting those investments into additional equity in the chip startup. "If either of such options is exercised by us or our co-investors, we would obtain control of Ampere and consolidate its results with our results of operations," the filing explains.

According to the document, Oracle spent roughly $48 million on Ampere processors during its 2023 fiscal year – some of it direct with Ampere and some through a third party. By comparison, Big Red spent just $3 million on Ampere's chips and had $101.1 million worth of products available under a pre-payment order by the end of fiscal year 2024.

This is despite the fact that Oracle is aggressively expanding its datacenter footprint to address growing demand for AI infrastructure. These efforts have included the deployment of massive clusters of GPUs from Nvidia and AMD with the largest campus developments nearing a gigawatt in scale.

The filing also revealed that Ampere founder and CEO Renée James will not seek re-election to Oracle's board of directors.

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The revelations come a week after reports surfaced that Ampere was exploring a potential sale and is no longer pursuing an initial public offering. According to Bloomberg, Ampere executives have worked with financial advisors to find a buyer.

Despite being one of the first to successfully commercialize an Arm-compatible datacenter-grade microprocessor – and winning customers including Microsoft and Google – Ampere faces growing competition not only from the likes of Intel and AMD, but its own customers.

To compete with Ampere's 192-core chips, Intel and AMD have competing products with 128 to 288 cores. Meanwhile, Microsoft and Google have announced custom Arm silicon of their own with their Cobalt and Axion chips respectively. Meanwhile, Arm itself has been pushing its Compute Subsystems (CSS) offering for customers that want a customized chip but can't be bothered to design one from the core up.

Ampere recently announced a 256-core version of its AmpereOne processor family, due out next year, and is also developing a 512-core part. ®