Science & Technology

AI Chip Makers Rebellions and Sapeon to Merge

On Wednesday, June 12, in South Korea, two local startups for the development of chips for artificial intelligence systems, which are Rebellions and Sapeon, agreed to merge.

AI Chip Makers Rebellions and Sapeon to Merge

Over the past couple of years, the mentioned Asian country has hosted many rounds of financing for companies that specialize in making microcircuits and are at an early stage of existence. This tendency, which has already become a relatively stable process, is associated with an increase in consumer demand for hardware for artificial intelligence apps. It is worth noting that the mentioned demand has recently demonstrated what can be called exponential growth. At the same time, the opinion is spreading in the expert community that the consolidation process has already begun in the AI market.

The merger of Rebellions and Sapeon is strategic. It is expected that the combined business structure will be able to take a leading position in the South Korean so-called fabless market of artificial intelligence chips. Also, the joint functional system of the two startups is likely to have a high level of competitiveness at the global level.

It is worth clarifying that fabless companies specialize in research and development, design, and marketing of chips. Such firms are in no way related to the production of microcircuits.

The media, citing insiders, reported that the combined company could become public within the next two to three years. The journalists’ informants used the right of anonymity since the details of the merger of Rebellions and Sapeon in the context of plans for further activities so far belong to the category of highly confidential data.

The mentioned companies perceive the upcoming two to three years as the so-called golden hour for South Korea. In this case, the possibilities of the Asian country are implied in the context of prospects for strengthening positions in the global market of artificial intelligence chips.

Also, Rebellions and Sapeon intend to develop a joint business in the sphere of neural processing units (NPUs). It is worth noting that currently there is an increase in consumer demand in the market for relevant products.

The conclusion of the deal on the merger of the two companies takes place at a pivotal point for the global chip industry. Currently, Nvidia is the absolute leader in the relevant market, whose market capitalization exceeded $3 trillion last week. The share of this company in the market of specialized chips for artificial intelligence is 97%. Nvidia’s result is largely due to its early leap to providing data center services and software that help other firms develop large language models and powerful AI apps.

At the same time, the prospects for Rebellions and Sapeon are very optimistic. Currently, computing equipment is becoming more expensive due to a sharp increase in demand and a decrease in the availability of chips. Companies operating in the artificial intelligence industry are seeking to reduce their dependence on Nvidia’s hardware. The concentration of certain products at one manufacturer contains potential risks. The most obvious negative scenario in this case is a large-scale destructive effect in the situation of problems that paralyze the activities of the supplier of goods. There is also a risk that the company may at some point begin to abuse its dominant position. It is worth noting that the listed probabilities are purely theoretical and the realism of their materialization belongs to the category of what can happen but does not necessarily happen.

Last month, Apple announced its intention to use its own chips to power its data centers with artificial intelligence. Google, Microsoft, and Amazon are already developing their hardware for AI apps.

Intel, AMD, Google, Meta, ARM, Broadcom, and some other companies have also teamed up to develop a standard for connecting artificial intelligence accelerator chips used in servers. It is worth noting that Nvidia has its own mechanism for connecting graphics processing units (GPUs) to servers.

Rebellions and Sapeon did not provide information about the ratio of the merger deal. It is known that the companies intend to complete the deal in the second half of 2024. Currently, there is information according to which Rebellions will lead the management of the business. All employees of both companies will join the new functional structure. Rebellions has 130 staff and Sapeon has more than 100 employees in South Korea and the United States.

As we have reported earlier, Black Semiconductor Raises $273 Million.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.