On Tuesday, Advanced Micro Devices (AMD) announced its plans to acquire Nod.AI, an open-source artificial intelligence software startup. Nod.AI, also known as Nod Labs, specializes in reinforcement learning, a type of AI system that learns through trial and error. The acquisition is part of AMD's strategy to expand and strengthen its presence in the AI software market, with the aim of competing with rival chipmaker Nvidia.

Nvidia has experienced significant revenue growth in recent times, with a year-over-year spike of over 100% for the quarter ending July 30, 2023. In contrast, AMD reported an 18% decline in revenue during the same period, although it still surpassed analysts' sales and profit estimates.

The acquisition of Nod.AI is expected to be completed within this quarter, according to an AMD spokesperson. The startup's team, consisting of industry experts, is known for their contributions to open-source AI software and their expertise in AI model optimizations. The AMD spokesperson stated that the deal will enhance AMD's AI software capabilities.

Nod Labs, founded in 2013, was initially focused on AI hardware, particularly gesture recognition and motion-tracking wearables such as Bluetooth-connected rings for gaming applications. The startup secured funding from venture capital firms like Menlo Ventures and Sequoia Capital and had team members with backgrounds in companies such as Apple, Google, and Samsung.

Anush Elangovan, CEO of Nod, was part of the first Chromebooks team at Google and previously worked as a lead engineer at Cisco. Harsh Menon, Nod's co-founder and chief technology officer, had experience working at Kitty Hawk, an electric aircraft company backed by Google co-founder Larry Page, which closed down in 2022.