Without much fanfare, Oracle has now poured roughly $850 million into Arm server chip design startup Ampere since its inception in 2017, according to SEC filings.
Oracle’s stake in Ampere appeared to grow by more than $400 million earlier this year, after Oracle disclosed that it had invested $300 million in convertible debt issued by Ampere in fiscal 2022 and acquired more Ampere stock from an undisclosed investor for $127.8 million, according to the company’s proxy statement filed with the SEC.
Last year, Macom Technology Solutions, which divested its Arm chip business that became Ampere, said that it had sold its equity interest in Ampere to a buyer affiliated with Oracle for $127.7 million.
Ampere declined and Oracle did not respond to a request for comment.
The size of Oracle’s bet on Ampere became clear in March after Oracle blamed a wider-than-expected operating loss, in part, on Ampere, Protocol reported earlier this year. At the time, SEC filings revealed that Oracle had invested $426 million in the company, and including Ampere in its operating losses implied a stake of 20% to 50%, according to accounting rules.
Part of Oracle’s earlier investment in Ampere included another $300 million payment in an equity fundraising round in March of 2021, and an agreement to purchase tens of millions of dollars worth of server chips designed by Ampere. The most recent proxy statement indicates Oracle has purchased $50.9 million worth of Ampere chips in fiscal 2022, including a $21.6 million against a $25 million prepayment Oracle made in fiscal 2020.
Ampere’s founder and CEO, Renee James, also sits on Oracle’s board. Oracle has been quietly investing in Ampere since 2017, and prior to the investment James, who has served on Oracle's board since 2015, was considered an independent board member. James was formerly president of Intel.
Ampere designs chips based on Arm technology and has made slow inroads into the data center CPU market, which is dominated by Intel and AMD. This market has long been dominated by Intel, but over the last few years it experienced manufacturing and other difficulties that led to delays launching new products, allowing AMD to pick up a bigger chunk of server chip sales and creating room for new entrants.
According to Jefferies, Ampere holds roughly 0.6% of cloud CPU instances, while AMD commands 17%, and Intel has 77.2% share. Graviton, Amazon’s in-house server CPU, has 4.2% share, though the company doesn't sell its custom chips to other cloud vendors.