Nervana, a deep learning company based in San Diego, has been acquired by Intel. Nervana was started in February 2014 by an ex-Qualcomm researcher (working on the Zeroth project, which I helped to found whilst running the internal Qualcomm R&D incubator) and with $25m of funding was able to generate a very good return for all involved. If the $408m price tag is correct (there are some conflicting reports of a $350m sale price) then Intel paid around $8.5m per employee.
The Nervana acquisition comes just a week after Apple paid $200m for Turi, another machine learning platform. Clearly, tech companies recognise the huge potential of machine learning and the scarceness and value of the best practitioners in the space.
This makes it an exciting time to be involved in machine learning. As with any nascent technology, investors and acquirers need to remain focused on the real-world value that can be generated. But in the case of machine learning, the potential for value creation through efficiency savings and other applications is simply staggering. That is why we at Oxford Capital and the larger technology community are so excited about the space.
Intel is snapping up deep learning startup Nervana Systems in a huge bet that artificial intelligence represents the next big shift inside corporate data centers. The chip giant isn’t actually saying how much it is paying, but a source with knowledge of the deal said it is valued at around $408 million. That’s some serious cheddar for a 48-person startup. Intel vice president Jason Waxman told Recode that the shift to artificial intelligence could dwarf the move to cloud computing. Machine learning, he said, is needed as we move from a world in which people control a couple of devices that connect to the Internet to one in which billions of devices are connecting and talking to one another.