May 25, 2022

Last year, when we wrote about a new investment in Israeli startup Granulate, which is applying artificial intelligence to high-priority computing workloads to streamline the way customers move across cloud and on-premise networks, we noticed some strengthening in the area of ​​network management. , , where the point solutions are selected by the players of the stage. Well, today this trend is also affecting the startup itself: chip giant Intel announced the acquisition of Granulate in order to continue its operations in Israel and better manage the traffic of Intel-based kits for Intel customers.

The acquisition of Granulate in the domestic market was secret, some publications reported that it took about a week to make it. Well-informed sources tell us that this acquisition will cost $650 million, although Intel and Granulate did not provide actual numbers in their press release today to support the news.

The deal is expected to close in the second quarter of 2022, with all 120 Granulate employees expected to join Intel.

“Today’s cloud and data center customers need scalable, high performance software to get the most out of their hardware,” said Sandra Rivera, executive vice president and general manager of the data center and AI group at Intel. “Granulate’s advanced standalone optimization software can be applied to production workloads, creating optimized hardware and software value for every cloud and data center customer without requiring the customer to make code changes.”

“We are expanding our portfolio of software optimization tools that provide flexible and scalable capabilities to meet the growing needs of the ubiquitous computing age,” said Greg Lavender, Chief Technology Officer, Senior Vice President and General Manager, Software and Advanced Technologies. Intel Technology Group. “Granulate’s innovative approach to real-time optimization software complements Intel’s existing capabilities to help customers improve performance, save on cloud computing and non-stop workloads.”

According to Pitchbook, Granulate has raised $45.6M from previous investors including Insight Partners, Red Dot Capital and Dawn for a nominal $110M valuation. The last time the company raised money was a year ago, in the $30 million Series B we discussed here, so based on that time, it looks like the deal was done by a business that is negotiating investments with companies (a point that often cites to takeover bids). , in discussions with potential strategic lenders).

The acquisition is part of a larger effort by Intel on multiple levels.

First, it describes how Intel continues to create more tools and services to help its customers better manage Intel-based networks to compete more strongly against companies like Nvidia, which has also acquired smaller HPC companies. and his management.

Granulate operates across multiple cloud and on-premises environments, where the company claims its software can improve response time by up to 40% and throughput by up to five times, while reducing the cost of an organization’s workloads by up to 60%. As we mentioned earlier, big tech companies like Netflix, Google, and Amazon usually invest large sums of money into building their optimization techs, but smaller organizations (and you’ll still be smaller than companies like Google) can have a lot of bandwidth. ability. won’t – pun – connect in the same way.

Asaf Ezra, co-founder and CEO of Granulate, told me last year, “We’re aware of these kinds of things going on in the Netflix that we created.” “But to us, it’s proof of how important you have to be to solve this problem and the talent you have to use to solve even the smallest problems.”

The grains will fit easily in one way: the other two worked closely, solutions designed to optimize resource management for customers using Intel-based computing architectures. Other Granulate partners include Microsoft, IBM, Google, DataDog and many more.

Granulate says that the so-called Intel Agent, built specifically to run on servers using Intel processors, includes a binary translation of the Intel AVX instruction set (something Intel created to improve performance and reduce overhead). Granulate is installed for a specific workload (claims a process takes 15 minutes) and notes that the agent uses AI to learn how the workload is behaving, and then performs CPU scheduling and kernel-level prioritization optimization to improve responsiveness.

There has also been some cross-fertilization between the two companies in terms of talent, with longtime Intel chief sales officer Ron Whitfield leading business development at Granulate last year to expand its customer base internationally and reach more market segments. The larger the granulate got, the more likely it was to be acquired by some of Intel’s biggest competitors, including Nvidia. The acquisition would allow the company to grow its business in ways that would be harder to achieve on its own.

“We believe that with Intel, we can help customers achieve significant cost savings and up to five times the throughput on their workloads,” Ezra said in a statement today. “As part of Intel, Granulate will be able to provide offline adaptability to even more customers around the world and quickly expand its offering with the help of 19,000 Intel software engineers.”

Secondly, the deal appears to be part of a larger effort by Intel to expand its footprint in Europe and Israel in particular. Earlier this month, the company announced an investment of 33 billion euros in research and development and production in Europe, the first tranche of investments of 80 billion euros in several years in several EU countries, including Germany and France. , Ireland, Italy, Poland and Spain.

His efforts in Israel were complementary and arguably at the forefront of what Intel is doing in that part of the world.

The Mobileye division, which is gearing up to retain a large stake in Intel as a stand-alone entity, was at the center of a commitment Intel made last year by investing $600 million in its R&D in Israel. He also carried out several other mergers and acquisitions to increase his presence there.

Most recently, in February, the company said it plans to acquire Tower Semiconductor for $5.4 billion to expand its foundry business. Other deals include using Cnvrg.io’s automated machine learning capabilities; and artificial intelligence chip maker Habana Labs. Notably, it also missed out on several major acquisitions: Reportedly interested in Mellanox, Nvidia ended up taking over the big data chip business.

Intel has believed in Israeli innovation for years and turned to Israeli “ghosts” to stay ahead of the market in various sectors. Intel has 12,000 employees and four R&D and manufacturing facilities in Israel,” said Avichai Michaeli, who advises investors and startups on deals. “The two most important acquisitions, Mobileye and Tower Semiconductor, were Israeli companies. We understand that their strategy for 2022 will be to buy more software companies here.

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