Oracle Owns Nearly a Third of Arm Chip House Ampere, Could Take Control In 2027

The Register's Tobias Mann reports: 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 Renee James will not seek re-election to Oracle's board of directors.

Oracle has a knack of buying excellent hardware pr

[guruevi]

And driving them into the ground. Ampere was the only feasible option and we were considering them for Ceph clusters but with a looming takeover by Oracle, the answer is probably nVIDIA Grace CPU which is the only viable system that can be purchased today on the open market.

Re:Oracle has a knack of buying excellent hardware

[Tailhook]

Can't imagine why you'd think so poorly of Oracle's ARM prospects, given their awesome stewardship of SPARC.

Re:Oracle has a knack of buying excellent hardware

[upuv]

Yeah as soon as rumours of Oracle buying something start to swirl we are instantly in the war room on how to get out of an potential lock in, zero support, no upgrade mess that is about to fall on us. Still trying to extricate ourselves of anything Oracle DB. But it keeps sneaking back in on the back of some other vendor product.

One of the key issues is once Oracle buys something all the smart people in that company leave. Instant product road block that never really gets removed.

A common question for us is there 3 or more players of significance in the market. For anything we need to buy. Reason being as soon as it's down to 2, big red or Oracle buy one of them.

Lina Khan's Response?

[kid_wonder]

I wonder if this will trigger any response from the FTC, and if the "national security" aspect of chip manufacturing would play a part of any lack of response.

Re:

[Aighearach]

Naw, anybody with national security concerns will use an ARM chip from Texas Instruments. Or more likely, already are.

Re:

[fuzzyfuzzyfungus]

It seems like the FTC probably should be concerned about the possibility of entire product lines or product categories just falling into the event horizon of one of the 'cloud' hyperscalers and ceasing to exist as anything but a rental option; which the absorption of Ampere by Oracle would probably be another step toward (for all the chatter about x86 being a legacy hegemony and ARM being a plucky upstart; once you start talking server rather than cellphones and set top boxes the script pretty much flips: