Abu Dhabi's MGX Joins Silver Lake in Strategic Acquisition of Intel's Altera
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Abu Dhabi's MGX Joins Silver Lake in Deal for Intel's Altera
MGX, an Abu Dhabi-backed investment company focused on artificial intelligence, joined private equity firm Silver Lake Management LLC in a 51% acquisition of Intel Corp.'s Altera, which makes programmable chips. MGX announced its involvement Tuesday in the transaction, which was completed earlier this week. Altera's products -- semiconductors that can be reprogrammed after they leave the factory -- are designed for a range of uses, including industrial robots, data centers and telecommunications.
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MGX co-invests with Silver Lake in Altera acquisition
DUBAI (Reuters) -MGX, an Abu Dhabi artificial intelligence investment firm and partner of Silver Lake, said on Tuesday it has joined the buyout group in acquiring a majority stake in California programmable chip business Altera, leaving Intel with a 49% holding. The size of MGX's investment was not disclosed. "Altera provides a foundational platform for next generation computing. This is an opportunity to scale a company of such significance into a true global leader for the AI era," said Omar Alismail, MGX chief investment officer, semiconductors and infrastructure. In April, Intel agreed to sell 51% of Altera to Silver Lake, valuing the unit at $8.75 billion, well below the nearly $17 billion Intel paid in 2015. Intel completed the transaction on September 12, with Silver Lake acquiring a majority stake in Altera for an equity value of about $3.3 billion, according to a regulatory filing, reflecting debt financing and cash for the business. MGX falls under the purview of Sheikh Tahnoon bin Zayed Al Nahyan, the United Arab Emirates' national security adviser and brother of the president, who steers a $1.5 trillion business empire spanning sovereign wealth funds, energy and the artificial intelligence giant G42. MGX was established last year with Abu Dhabi sovereign wealth fund Mubadala and G42 as founding partners and ambitions to surpass $100 billion in assets. It has quickly become a centrepiece of the United Arab Emirates' drive to dominate financial intelligence. (Reporting by Hadeel Al Sayegh; Editing by Susan Fenton)
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MGX, an Abu Dhabi AI investment firm, partners with Silver Lake to acquire a 51% stake in Intel's Altera, a programmable chip maker. The deal, valued at $8.75 billion, positions Altera as a key player in the AI-driven computing era.
Strategic Acquisition in the AI Chip Industry
In a significant move that underscores the growing importance of artificial intelligence in the semiconductor industry, Abu Dhabi-based MGX has joined forces with private equity firm Silver Lake Management LLC to acquire a majority stake in Intel Corp.'s Altera unit. The transaction, which was completed earlier this week, involves the purchase of 51% of Altera, leaving Intel with a 49% holding .
Deal Valuation and Financial Details
The deal values Altera at $8.75 billion, a notable decrease from the nearly $17 billion Intel paid for the company in 2015. According to regulatory filings, Silver Lake acquired its majority stake for an equity value of approximately $3.3 billion, reflecting debt financing and cash considerations for the business . While the exact size of MGX's investment has not been disclosed, their participation in the deal is seen as a strategic move in the AI investment landscape.
Altera's Strategic Importance in AI Computing
Altera specializes in programmable chips, which are semiconductors that can be reprogrammed after manufacturing. These versatile components have a wide range of applications, including industrial robots, data centers, and telecommunications . Omar Alismail, MGX's Chief Investment Officer for semiconductors and infrastructure, emphasized the strategic importance of the acquisition, stating, "Altera provides a foundational platform for next generation computing. This is an opportunity to scale a company of such significance into a true global leader for the AI era" .
Abu Dhabi's AI Ambitions
The involvement of MGX in this deal highlights Abu Dhabi's ambitious plans in the artificial intelligence sector. MGX, established last year with founding partners including Abu Dhabi sovereign wealth fund Mubadala and AI giant G42, aims to surpass $100 billion in assets. The investment firm falls under the purview of Sheikh Tahnoon bin Zayed Al Nahyan, the United Arab Emirates' national security adviser, who oversees a $1.5 trillion business empire .
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Implications for the Global AI Landscape
This acquisition represents a significant step in the United Arab Emirates' drive to dominate financial intelligence and establish itself as a major player in the global AI industry. By partnering with Silver Lake, a renowned private equity firm, MGX is positioning itself at the forefront of AI-driven technological advancements. The deal also reflects the growing trend of Middle Eastern investment in cutting-edge technology sectors, as countries in the region seek to diversify their economies beyond traditional oil and gas industries.
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Future Prospects for Altera
With the backing of MGX and Silver Lake, Altera is well-positioned to expand its role in the AI and advanced computing markets. The company's programmable chips are likely to play an increasingly important role in the development of AI applications, data center optimization, and the advancement of technologies such as 5G and the Internet of Things. As the demand for flexible and efficient computing solutions continues to grow, Altera's technology could become even more crucial in shaping the future of AI-driven industries.
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