Meta Platforms (META) is buying privately held microchip startup Rivos in order to boost its internal semiconductor development and gain more control over its artificial intelligence (AI) infrastructure.
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Rivos develops its own graphics processing units (GPUs), the type of microchip that powers most AI-related work. While Meta already has an internal team building microchips and processors for AI development, the company continues to spend billions of dollars to buy GPUs from external partners such as Nvidia (NVDA).
The financial terms of the acquisition were not made public. However, Rivos was seeking new funding at a $2 billion valuation in August of this year. The acquisition is the latest example of Meta Platforms’ aggressive capital expenditures on AI. The company has pledged to spend more than $600 billion on AI over the next three years.
AI Deals
This purchase of Rivos appears to be part of Meta Platforms’ broader effort to reduce its reliance on external chip suppliers such as Nvidia for its AI operations. The acquisition of Rivos was disclosed on the same day that Meta announced another significant AI-related deal.
Separate to the Rivos purchase, Meta announced that it had reached a $14.2 billion AI cloud infrastructure deal with CoreWeave (CRWV), which operates data centers in the U.S.
Is META Stock a Buy?
The stock of Meta Platforms has a consensus Strong Buy rating among 47 Wall Street analysts. That rating is based on 41 Buy and six Hold recommendations issued in the last three months. The average META price target of $872.30 implies 14.58% upside from current levels.
