Intel has agreed to acquire chip maker Altera for $16.7 billion, embracing a breed of microprocessor that represents the future of the massive data centers that underpin the world's online services.
Altera makes field programmable gate arrays, or FPGAs---chips you can program to perform very specific tasks. Because these chips don't require as much power or as much space as the microprocessors that have traditionally driven the world's internet services, many believe they will become increasingly prevalent in data centers. Microsoft is already using these chips in part to power its Bing search engine.
"The acquisition will couple Intel’s leading-edge products and manufacturing process with Altera’s leading field-programmable gate array (FPGA) technology," Intel said in a statement. "The combination is expected to enable new classes of products that meet customer needs in the data center and Internet of Things (IoT) market segments."
The deal was rumored earlier this year. "This is where the things are moving. And Intel is responding," Jason Mars, a professor of computer science at the University of Michigan whose research focuses on hardware used in the modern data center, told WIRED at the time. Mars and other Michigan researchers recently released a study showing why FPGAs---and other low power chips called GPUs---are particularly well suited to services driven by voice recognition, such as Apple's Siri and similar digital assistants from Google and Microsoft.
Intel and Altera were already collaborating on an experimental computer motherboard that includes traditional Intel server chips and Altera FPGAs. Intel says this type of technology will eventually become a commercial offering.
The deal---which sees Intel pay $54 a share in cash for Altera, 11 percent above the company's closing price on Friday---is another way Intel is shifting its business in an effort to maintain its place as the world's largest chip maker. As internet giants like Google and Facebook embrace GPUs as a way of powering their speech and image recognition services---as well as all sorts of other services that rely on artificial intelligence---they're also exploring the possibility of equipping data center servers with low-power chips based on the ARM architecture used in a majority of today's smartphones. Though traditional CPUs will continue to play an enormous role in modern data centers, Intel must embrace new technologies in order to stay ahead.
