AMD will pay about $2.9 billion USD (about $4.1 billion CAD) for Toronto AI chip startup Taalas, according to a securities filing Wednesday, The Globe and Mail reports. AMD announced the deal in August but didn’t say what it was paying.
The cash-and-stock deal comes with a catch: $1.4 billion USD (about $2 billion CAD) of the price depends on conditions the filing doesn’t spell out, the Globe reports. The deal hasn’t closed yet and still needs regulatory approval.
One of the biggest Canadian tech deals in years
The Globe calls it the largest known deal for a Canadian tech company since Ecolab agreed in March to buy Calgary’s CoolIT Systems for $4.75 billion USD. It’s also bigger than Nasdaq’s $2.75-billion USD purchase of Verafin in 2020.
It’s a big markup for a young company. Taalas was founded in August 2023 and a funding round last November implied a valuation of more than $750 million USD, the Globe reports. It raised more than $225 million USD in venture money in total, including a $169-million USD round in February. Its CEO, Ljubisa Bajic, wrote at the time that the company had 24 employees and had spent just $30 million USD.
What Taalas makes
Most AI chips are general-purpose. Taalas takes the opposite approach: it builds chips around a single AI model. Its first product is a hard-wired version of Meta’s Llama 3.1 8B. Taalas claims it runs about 10 times faster than the current state of the art while costing 20 times less to build and using a tenth of the power. Those are the company’s own figures.
The founders are former AMD executives Ljubisa Bajic, Lejla Bajic and Drago Ignjatovic. Ljubisa Bajic also founded Tenstorrent, another Toronto AI chip company, in 2016.
Will it stay in Canada?
AMD says it plans to build Taalas’s technology into its future AI chips, and cites “a continued commitment to retaining and growing Canadian talent.” AMD already has more than 3,800 employees in Canada and a major office in Markham, Ont., the Globe reports. AMD’s Toronto-based chief software officer, Andrej Zdravkovic, said on social media that the Taalas team would join AMD’s Canadian workforce.
Why it matters: It’s a big payday for a Canadian chip startup that’s less than three and a half years old, and a sign of how much big chipmakers will pay for AI inference technology. The team is set to stay in Canada, but the company and its technology will belong to AMD. Watch which conditions decide the last $1.4 billion USD, and whether Ottawa reviews the deal.