Korean Chip Startup FuriosaAI Declines $800 Million Takeover Offer from Meta
Korean chip startup FuriosaAI has turned down an $800 million acquisition proposal from Meta Platforms Inc., opting to develop its business independently. A source familiar with the situation disclosed this information, requesting anonymity as the discussions were private.
Meta’s Interest in FuriosaAI
Meta has been in negotiations to acquire the Seoul-based FuriosaAI since the beginning of the year. Despite the attractiveness of the offer, the startup decided to stay the course of growing as an independent entity. A representative from FuriosaAI declined to provide further comments on the matter, while Meta officials were unavailable for remarks outside regular business hours on Sunday.
About FuriosaAI
Founded eight years ago, FuriosaAI is one of the few Asian startups to have captured Meta’s attention. The company, led by June Paik—formerly of Samsung Electronics Co. and Advanced Micro Devices Inc.—specializes in semiconductors specifically designed for AI inferencing and services.
The RNGD Processor
FuriosaAI’s latest innovation is the RNGD processor (pronounced “Renegade”), engineered to compete with products from industry giants like Nvidia Corp., as well as startups such as Groq Inc., SambaNova Systems Inc., and Cerebras Systems Inc.
Market Reaction
The decision to turn down the acquisition offer had immediate financial repercussions. Shares of DSC Investment Inc., a prominent investor in FuriosaAI, plummeted over 16% on Monday following news of the proposal. The stock had seen a significant rise when rumors of the Meta takeover first surfaced in February.
Meta’s AI Investment Strategy
Meta is heavily investing in artificial intelligence infrastructure with the intent of enhancing its competitive edge against rivals such as OpenAI and Google, along with emerging companies like DeepSeek from Hangzhou.
Plans for 2023
In mid-January, Meta CEO Mark Zuckerberg announced plans for the company to spend as much as $65 billion this year, focusing on building a large data center and expanding its AI workforce. Just a week later, he indicated that expenditures on AI infrastructure could eventually reach hundreds of billions.
Custom Chip Development
The Menlo Park, California-based company is also working on its own chips to meet specific AI workload demands, which include enhancing advertisement ranking and recommendations on platforms like Facebook and Instagram. This year, Meta introduced its inaugural custom AI inference chips and unveiled an upgraded version of these last year.
FuriosaAI’s Future Plans
Looking ahead, FuriosaAI intends to raise additional capital before pursuing an initial public offering (IPO). According to insiders, they are expected to finalize an extended Series C funding round in about a month, which is anticipated to exceed its original target.
Current Partnerships
The startup currently employs approximately 150 people, with 15 based in its Silicon Valley office. FuriosaAI is actively providing samples of its chips to notable clients, including LG AI Research—the artificial intelligence division of LG Group—and Saudi Aramco. This initiative is part of a broader strategy involving around a dozen customers engaged in sampling throughout the first half of this year.
Technical Specifications
The RNGD chip is constructed using Taiwan Semiconductor Manufacturing Co.’s advanced 5-nanometer process technology and incorporates HBM3 memory chips supplied by SK Hynix Inc.
Conclusion
FuriosaAI’s decision to remain independent in the face of a lucrative acquisition offer from Meta reflects the company’s ambition and robust growth strategy in the competitive semiconductor market focused on AI technologies. As it seeks to secure further funding and establish stronger partnerships, FuriosaAI is positioning itself for a promising future.
Frequently Asked Questions
- What is FuriosaAI?
FuriosaAI is a Korean chip startup that specializes in developing semiconductors for AI inferencing and services. - Why did FuriosaAI decline Meta’s acquisition offer?
FuriosaAI chose to grow independently rather than accept Meta’s $800 million takeover bid, aiming for further business development and an eventual IPO. - What is the RNGD processor?
The RNGD processor, pronounced “Renegade”, is FuriosaAI’s second-generation chip designed to compete with industry leaders like Nvidia and other startups. - Who are FuriosaAI’s main investors?
One of the major investors in FuriosaAI is DSC Investment Inc., a South Korean venture capital firm. - What are Meta’s AI investment plans?
Meta plans to spend up to $65 billion this year to enhance its AI infrastructure and workforce as part of its broader strategy to compete in the AI space.
