Amazon to acquire secretive Israeli chip designer Annapurna Labs

PanARMENIAN.Net - Amazon.com Inc. said it has agreed acquire secretive Israeli chip designer Annapurna Labs Ltd., a potential boost to its rapidly growing business that rents computing power to other companies, the Wall Street Journal

An Amazon spokeswoman confirmed the deal after reports that the two companies were in advanced talks. She declined to disclose terms, the Journal says.

Amazon had been discussing paying $350 million, according to two people familiar with the matter, though they said the price could rise to $375 million, depending on certain conditions.

Based in Yoqneam, in Israel’s north, Annapurna Labs was founded in 2011 by Avigdor Willenz, founder of the chip-design company Galileo Technologies Ltd.; Marvell Technology Group Ltd. bought Galileo for $2.7 billion in 2000.

Originally funded by Willenz and people related to him, Annapurna hasn’t revealed the technology it is developing. The people familiar with the matter said Annapurna develops midrange networking chips for data centers that transmit more data and use less power.

Seattle-based Amazon, a global market leader in cloud services and online retailing, likely would use Annapurna’s designs in its extensive data centers to lower operating costs, the Journal says.

Amazon Web Services rents computing power and data storage to more than one million businesses. Amazon doesn’t disclose revenue for the unit, but Piper Jaffray analyst Gene Munster estimates that it could post nearly $6 billion in revenue this year, up from $4.3 billion in 2014.