❯ Anthropic discussed buying chip startup MatX for $7 billion; talks are dead

in-house silicon stallsAnthropic held talks to acquire AI chip startup MatX for roughly $7 billion, aiming to bring custom hardware design in-house, Reuters reported. The talks are no longer active and have shifted to a partnership discussion. MatX is now seeking new capital at a valuation of about $4 billion. Reuters could not determine why the deal fell away.

what MatX isFounded in 2022 in Fremont, California, MatX was started by Reiner Pope and Mike Gunter, both veterans of Google’s TPU team, and builds chips tuned specifically for large-model training and inference. The company closed a $500 million Series B; its 2024 Series A carried a post-money valuation of only about $300 million. The jump from $300 million to a $7 billion offer says buyer urgency around custom silicon rose faster this year than the company itself did.

the cost structureDesigning chips is expensive and slow, and buying a team is the shortcut. With the deal dead, Anthropic’s long-run inference costs stay tied to outside suppliers — awkward for a company preparing an IPO and explaining its gross margin path to investors. MatX’s $4 billion standalone round offers the other answer: while every large buyer wants custom silicon, independent chip companies have no shortage of acquirers, only a shortage of reasons to stay independent.

▪ SIGNALA $7 billion acquisition failed while a $4 billion independent round did not — pricing power in custom silicon is moving back toward the seller.