Amazon’s $7 billion Decart talks are a bet on getting AI developers off Nvidia

Amazon is in talks to buy Decart, a San Francisco AI startup whose software makes it easier for developers to switch between different AI chips, in a deal that could value the company at around $7 billion, The Wall Street Journal reported Sunday, citing people familiar with the matter. A deal could come together soon if the talks don’t collapse.

That’s about $1 billion more than the price Anthropic walked away from. The Claude maker had been in talks to buy Decart for about $6 billion and had done due diligence before deciding against the deal in September, Bloomberg Law reported, summarizing the Journal’s story.

Decart was founded in 2023 by three Israeli engineers, brothers Dean and Orian Leitersdorf and Moshe Shalev. Its core product, DOS, is optimization software. A developer normally has to tune a neural network separately for every chip it will run on, a job that can take months. Decart says DOS cuts that to a few weeks, SiliconANGLE reported in May, which makes it cheaper to move a workload from one chip to another when prices or supply change.

Decart says it earns “significant revenue” licensing DOS to cloud providers and AI labs. Its other two products, Lucy and Oasis, are world models, AI systems that generate or alter video and 3D scenes in real time. Lucy edits live footage; Oasis builds simulated spaces such as warehouses for training robots.

In May, Decart raised $300 million at a valuation of nearly $4 billion, up from $3.1 billion the previous August. Nvidia invested in that round, and Amazon had already signed on as a strategic customer, Ctech reported.

So Amazon would be buying a company Nvidia backed, whose main product makes it cheaper to run AI on chips other than Nvidia’s.

Amazon designs its own AI chips and rents them to customers through AWS. Every rival chip runs into the same obstacle with those customers: AI code that was written and tuned for Nvidia hardware, and that someone has to pay to retune. Software that shortens the retuning lowers that switching cost, and the company that most wants it lowered is the one with a competing chip to rent.

Anthropic buys computing power, so a tool for moving between Nvidia, Amazon and Google chips would save it money as a customer. Amazon can use the same tool to win customers, since every model retuned for its chips is a workload that can move off Nvidia hardware and onto AWS.

Decart’s licensing customers include cloud providers, and software owned by one cloud is a harder sell to the others.

Amazon is also one of Anthropic’s largest investors.

Sources

• The Wall Street Journal: Amazon in Talks to Buy AI Startup Decart for Around $7 Billion
• Bloomberg Law: Amazon Is in Talks to Buy AI Startup Decart, WSJ Reports
• The Wall Street Journal: Startup Makes Switching AI Chips Easier, and Nvidia Is a New Investor
• SiliconANGLE: Decart raises $300M for its AI optimization software, world models
• Ctech: Nvidia backs Israeli AI unicorn Decart in $300 million funding round at $4 billion valuation