In a move that has taken the global tech industry by surprise, South Korean AI hardware startup FuriosaAI has declined an $800 million acquisition offer from Meta, the tech giant formerly known as Facebook. The proposed deal, which was significantly higher than the startup's estimated value, was turned down, marking a rare instance of a startup rejecting an offer from a company as influential as Meta.
The discussions around the potential acquisition began in late October of the previous year, as reported by several South Korean news outlets. Prior to setting its sights on FuriosaAI, Meta had been scouting AI semiconductor companies in Israel and the United States. The tech behemoth was eager to secure the deal, offering a sum that was approximately $300 million more than the estimated value of the South Korean startup.
However, the deal fell through due to disagreements over key strategic decisions. One of the primary reasons for FuriosaAI's refusal was the stipulation that, post-acquisition, the startup would be required to develop customized AI chips exclusively for MetaAI services.
FuriosaAI's Ambition and Innovation
This would have limited the startup's ability to develop more universally applicable AI chips that could compete with the likes of Nvidia, and other AI chip manufacturers. According to a report by Maeil Business Newspaper, the two companies were unable to reach an agreement on the organization's structure and future direction following the acquisition.
FuriosaAI, co-founded by June Paik, specializes in designing AI chips that are optimized for rapid and efficient processing, particularly in data-intensive tasks such as machine learning. These chips are considered superior alternatives to traditional graphics processors, which consume more power.
The startup's RNGD (Renegade) chip, unveiled at the Hot Chips 2024 event, is a testament to this. The chip, built using advanced 5nm chip technology from TSMC, uses dual HBM3 memory and delivers approximately double the efficiency of traditional GPUs while using only a quarter of the power.
Attracting Potential Buyers and Future Plans
The startup's bold claim that its performance per watt is superior to most advanced chips currently available in the market, including Nvidia's H-100 chips, has piqued the interest of potential buyers. Notably, LG AI Research and Saudi Aramco have signed up to test the capabilities of the RNGD chip.
In an interview with Maeil Business News, FuriosaAI CEO Jun-ho Baek expressed confidence in the success of the RNGD chip and revealed plans to mass-produce the chip in the second half of the year. This is not the first time a startup has turned down an acquisition offer from a tech giant. In 2013, Snapchat famously rejected a $3 billion acquisition offer from Facebook, choosing instead to remain independent.
