❯ Amazon is in talks to buy AI software company Decart for about $5.5 billion

Negotiating priceIsraeli outlet CTech reported on October 13 that Amazon is negotiating to buy Decart at about $5.5 billion, possibly signing by month-end; Decart did not comment. That is below the up to $7 billion The Wall Street Journal reported earlier.

Making models run on other chipsDecart’s DOS software tunes AI models for a specific chip so they run efficiently on processors from different makers. According to SiliconANGLE, that work used to take months and now takes weeks, letting companies move workloads when chips are scarce or needs change. Decart also builds world models Lucy and Oasis for games and robot training.

A company of under 100 peopleDecart was founded by brothers Dean and Orian Leitersdorf and Moshe Shalev, has fewer than 100 employees and makes tens of millions of dollars, mainly from project work. Its AI-generated game Oasis passed a million users in three days. It raised $300 million at $4 billion in May; Sequoia, Benchmark and Nvidia are shareholders.

Several suitorsCTech says Nvidia made the first serious offer, and Anthropic walked away a month ago after due diligence; SiliconANGLE reported that price at about $6 billion. Decart has worked with Amazon almost since its founding, was among the first to show models running more efficiently on Amazon chips than on Nvidia GPUs, and got early access to Trainium3 last year.

Software for its own chipsAmazon is building its own Trainium chips to rely less on Nvidia, but chips only get used if models run smoothly on them. Buying Decart brings that fitting work in-house. Amazon bought Israeli chipmaker Annapurna Labs in 2015 for about $350 million; this price is more than ten times higher.

▮ SIGNALThe in-house chip race comes down to software: whoever makes models run smoothly on its chips can pull customers away from Nvidia.