Microsoft Acquiring Fungible for Bargain Price of $190M

Microsoft is purchasing data processing startup Fungible for $190 million, according to multiple sources. Despite raising at least $300 million since 2015, the young company has resorted to laying off employees, reducing its product line, and abandoning its plans for developing composable infrastructure solutions to stay afloat. The low asking price includes the company’s employees, intellectual property (IP), and everything else, after it failed to raise further funding. Microsoft originally planned on striking a custom silicon partnership before deciding to buy the company outright.

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Fungible was founded in 2015 by industry veterans Pradeep Sindhu and Bertrand Serlet, both former employees of Xerox PARC. Together, they developed a Data Processing Unit (DPU) chip to relieve datacenter traffic, handling storage, networking, and security and allowing them to more efficiently run application code. The company showed promise, even acquiring Cloudistics in 2020 to add composability technology, before running into trouble against its competition, including Nvidia and Lightbits Labs.

If the acquisition is completed, Microsoft could use Fungible’s DPU chips to help make its Azure cloud data centers operate more efficiently.