Meta targets chip startup Rivos in multibillion-dollar deal to reduce Nvidia dependence

Meta is reportedly looking to acquire chip startup Rivos in a multibillion-dollar deal aimed at strengthening its in-house semiconductor program and reducing dependence on Nvidia. The acquisition would give Meta greater control over its AI infrastructure as the company prioritizes artificial intelligence development over its previous metaverse ambitions, with AI spending commitments reaching tens of billions of dollars.

What you should know: Meta executives have grown frustrated with the slow pace of internal chip development, prompting leadership to explore external acquisitions to accelerate progress.

• The company already operates its own chip project called Meta Training and Inference Accelerator (MTIA), but like other hyperscalers, still relies heavily on expensive Nvidia GPUs.
• In 2024, Meta unsuccessfully attempted to acquire Korean chip startup FuriosaAI for $800 million—roughly $300 million over the startup’s estimated market value—due to disagreements over post-acquisition direction.

The big picture: Meta’s acquisition strategy reflects CEO Mark Zuckerberg’s pivot from the metaverse to making AI the company’s top priority, requiring massive infrastructure investments.

• The social media giant is determined to bring more of its AI supply chain under its own roof to gain independence from external suppliers.
• Rivos raised $250 million in Series A.3 funding in April 2024, and any sale price is expected to be in the high nine to ten figure range.

Why Rivos matters: The startup brings specialized expertise in RISC-V chip architecture that could be tailored specifically for Meta’s AI workloads.

• RISC-V is an open-source chip design standard that allows companies to customize processors for specific tasks, potentially offering performance advantages over general-purpose chips.
• The acquisition would provide Meta with a team capable of building specialized chips designed for artificial intelligence applications.

Potential complications: Rivos has faced legal challenges that could complicate any deal.

• In 2022, Apple accused the company of stealing trade secrets through former employees, though the dispute was resolved last year after counterclaims were filed.
• Whether the current acquisition talks will successfully conclude remains uncertain given Meta’s previous failed attempt with FuriosaAI.