Advanced Micro Devices announced Tuesday it will acquire Nod.AI, an open-source artificial intelligence software startup, to expand the chipmaker's AI software operations.
Nod.AI, or Nod Labs, builds open-source technologies "for future AI systems," according to the startup, and it mainly specializes in reinforcement learning, a type of system that "learns" via trial and error.
The acquisition is part of AMD's "AI growth strategy" that it hopes will better shore up its competition against rival chipmaker Nvidia, which saw its revenue spike more than 100% year over year for the quarter ending July 30, 2023. During the same period, AMD reported a revenue decline of 18% but still beat analysts' estimates for sales and profit.
The acquisition is expected to close this quarter, an AMD spokesperson told CNBC.
"Nod.ai's team of industry experts is known for their substantial contributions to open-source AI software and deep expertise in AI model optimizations," an AMD spokesperson told CNBC, adding that the deal "augments AMD's AI software capabilities."
Prior to founding Nod in 2013, Anush Elangovan, the startup's CEO, was part of the first Chromebooks team at Google and a lead engineer at Cisco. Harsh Menon, Nod's co-founder and chief technology officer, previously worked at Kitty Hawk, the electric aircraft company backed by Google co-founder Larry Page, which shut down in 2022.
Nod Labs was initially billed as an AI hardware company focusing on gesture recognition and motion-tracking wearables, such as Bluetooth-connected rings for use in gaming — think: Making a real-life hand gesture using your thumb and forefinger to shoot a gun in a virtual reality game. The startup raised millions in funding from venture capital firms such as Menlo Ventures and Sequoia Capital, and team members reportedly hailed from Apple, Google, Samsung and more.
Nod.AI did not respond to CNBC's request for comment.