Fabless AI chip makers Rebellions and Sapeon to merge as competition heats up in global AI hardware industry
What are the main reasons behind the strategic merger between Rebellions and Sapeon in South Korea's AI chip industry?
The strategic merger between Rebellions and Sapeon in South Korea's AI chip industry is aimed at leading the fabless AI chip market in the country and taking on global rivals like Nvidia2. The companies believe that the next two to three years present a "golden time" for South Korea to win the global AI chip market, and they intend to strengthen their neural processing unit (NPU) business after the merger2.
The merger comes at a crucial moment in the global chip industry, as the demand for AI hardware is skyrocketing, and compute is getting costlier due to increased demand and limited chip availability. This has led to AI companies trying to break away from their dependence on Nvidia for hardware. The merged entity of Rebellions and Sapeon could potentially go public in the next two to three years, according to industry sources.
How do Rebellions and Sapeon plan to compete with global AI chip market leaders like Nvidia following their merger?
Rebellions and Sapeon plan to compete with global AI chip market leaders like Nvidia by focusing on the rapidly increasing demand for neural processing units (NPUs) and strengthening their NPU business after the merger. They aim to lead the fabless AI chip market in South Korea and consider the next two to three years as a "golden time" for the country to win the global AI chip market2. By merging, the two companies hope to combine their resources, expertise, and talent to create a more competitive and robust entity that can challenge the dominance of companies like Nvidia. Additionally, the merged company could go public in the next two to three years, which would provide them with more resources to invest in research and development, as well as expand their operations.
What impact has Nvidia’s dominance in the global specialized AI chip market had on other companies developing AI technologies?
Nvidia's dominance in the global specialized AI chip market has significantly impacted other companies developing AI technologies. As Nvidia accounts for more than 97% of the global market, it has become a crucial player in the industry, causing other companies to either rely on Nvidia's products or try to compete against its advanced technology.
For instance, companies like Google, Amazon, and Microsoft are already building their own hardware for AI applications, while Apple plans to use its own chips to power its AI data centers. Moreover, Intel, AMD, Google, Meta, ARM, Broadcom, and others have formed a group to develop a standard to connect AI accelerator chips used in servers, in a move directly against Nvidia, which has its own mechanism for connecting GPUs in servers.
The increasing demand for AI hardware and the costlier compute due to Nvidia's dominance have led companies like Rebellions and Sapeon to merge and strengthen their position in the market. This strategic move aims to take on global rivals like Nvidia and capitalize on the rapidly growing demand for neural processing units (NPUs).