Advanced Micro Devices (AMD) has agreed to acquire Taalas, a startup specializing in silicon that hardwires artificial intelligence models directly into chips.

The acquisition marks a strategic pivot for the semiconductor giant, which is seeking to diversify its AI hardware portfolio beyond its traditional graphics processing units (GPUs) and custom accelerators.

The acquisition complements AMD’s recent $5 billion investment in Anthropic, signaling a multi-pronged approach to securing its position in the AI supply chain.

Taalas’ technology focuses on embedding specific AI models, such as Meta’s Llama 3.1, into the physical architecture of the chip to optimize inference performance and efficiency.

While the company currently supports smaller model variants, it is developing silicon capable of handling larger, more advanced architectures.

This move underscores AMD’s broader strategy to address the growing demand for specialized AI hardware in data centers, where cloud providers are aggressively scaling up infrastructure to support generative AI workloads.

The acquisition complements AMD’s recent $5 billion investment in Anthropic, signaling a multi-pronged approach to securing its position in the AI supply chain.