On November 29th, Amazon spent USD 80 million to acquire Xperi's subsidiary Perceive, deepening its strategic layout in edge AI technology

According to the financial news app Zhitong Finance, Amazon (AMZN.US) has announced that it has reached an acquisition agreement with chip manufacturer and AI model compression company Perceive, with a transaction amount of $80 million in cash. Perceive is a subsidiary of the listed company Xperi (XPER.US) located in San Jose, California, focusing on providing edge inference solutions for large artificial intelligence models for edge devices. Xperi holds approximately 76% of Perceive's shares.

The transaction was signed last Wednesday and is expected to be completed within 90 days, but may be extended to six months if regulatory conditions require. Details of the transaction were disclosed by Xperi to the U.S. Securities and Exchange Commission in a filing submitted last Friday, including an asset purchase agreement that stipulates restrictions on certain business activities for Xperi and Perceive for three years after the completion of the transaction.

Perceive's technology focuses on running large AI models on edge devices, which are typically located at the network edge with limited power, processing capabilities, connectivity, and storage space. Although Amazon has not disclosed its specific application plans for this technology, a company spokesperson stated, "We are pleased to have signed the agreement to acquire Perceive and welcome their talented team to join us in advancing the application of large language models and multimodal experiences on edge devices."

Since the beginning of this year, Xperi has been looking for a buyer for Perceive. After the transaction is completed, it is expected that most of the 44 employees of Perceive will join Amazon. Amazon believes that this transaction is a routine acquisition and is not expected to require approval from regulatory authorities.

Regulatory agencies closely monitor AI transactions between tech giants and small startups. For example, Amazon's licensing agreement with Adept in June attracted the attention of the U.S. Federal Trade Commission. Adept is a well-funded startup dedicated to developing AI agents for automating enterprise workflows.

Amazon stated that the acquisition of Perceive will build on its existing investments in edge technology and custom silicon chips, aiming to enhance device performance and speed, and strengthen its efforts in large language models and multimodal experiences. Amazon Web Services' cloud division has been developing custom silicon chips for cloud computing and AI workloads for years, thanks to the acquisition of Annapurna Labs ten years ago.

This acquisition will be carried out through Amazon's Devices and Services division, which includes the Alexa voice assistant, Fire TV, as well as Echo smart speakers and displays. Since last fall, this division has been led by former Microsoft executive Panos Panay.

Perceive is led by co-CEOs Murali Dharan and Steve Teig, with employees in the United States, Canada, Ireland, Romania, and Estonia. After the transaction is completed, Perceive's laboratory in Boise, Idaho is expected to remain open. Amazon expects that the "vast majority" of Perceive's employees will join the Devices and Services team, either working at existing Amazon sites near their current location or working remotely Xperi incubated Perceive and spun it off as an independent subsidiary in 2018. In February this year, Xperi announced that it had hired external financial advisors to explore strategic alternatives for Perceive. Competitors in the market include many startups dedicated to building edge AI computing technologies, such as Axelera in the Netherlands and Halio in Tel Aviv, which raised $68 million and $120 million in June and April respectively.

Xperi CEO Jon Kirchner said in a press release, "Since its inception, the landscape of edge inference technology has undergone significant changes. Perceive has successfully adapted to this rapidly changing environment with its leaders and engineers' skills." He added, "We are pleased to have found the right home for Perceive, its employees, and its technology, and we believe that Amazon can take this technology to a new level. We are confident in the potential of this technology."