AI Chip Startup FuriosaAI Rejects Meta's $800 Million Offer

Korean semiconductor startup FuriosaAI has rejected an $800 million acquisition bid from Meta Platforms Inc., opting instead to continue growing independently, according to a source familiar with the situation. Meta had been in talks to acquire the Seoul-based company since the beginning of the year, the source said, speaking anonymously due to the private nature of the discussions.

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FuriosaAI declined to comment, and Meta representatives were not immediately available for a response outside of normal business hours on Sunday.

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FuriosaAI is among a small group of Asian startups that have drawn interest from Meta. Led by CEO June Paik—who previously worked at Samsung Electronics Co. and Advanced Micro Devices Inc.—the company specializes in developing AI inference chips, which are crucial for processing AI workloads.

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Founded eight years ago, FuriosaAI recently unveiled its second-generation processor, RNGD (pronounced "Renegade"), which aims to compete with industry leader Nvidia Corp. as well as emerging players like Groq Inc., SambaNova Systems Inc., and Cerebras Systems Inc.

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News of Meta’s interest had fueled investor excitement earlier this year, but with the deal now off the table, shares of South Korean venture capital firm DSC Investment Inc., a key backer of FuriosaAI, tumbled more than 16% on Monday. The stock had previously surged in anticipation of a potential takeover since speculation began circulating in February.

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Meta has been making significant investments in AI infrastructure as it seeks to stay competitive in a rapidly evolving industry. The company faces stiff competition from OpenAI, Google, and Chinese startups such as Hangzhou-based DeepSeek. In mid-January, CEO Mark Zuckerberg announced that Meta plans to spend up to $65 billion this year on AI-related investments, including the construction of a large data center and an expansion of its AI workforce. Just a week later, he told investors that the company anticipates eventually allocating hundreds of billions of dollars toward AI infrastructure.

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As part of its AI strategy, Meta has also been developing its own chips to handle AI workloads across its platforms, including Facebook and Instagram. These chips power AI-driven ranking and recommendation algorithms used in targeted advertising. In 2023, the company introduced its first custom AI inference chips and followed up with an upgraded version last year.

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FuriosaAI, meanwhile, has ambitious plans for the future. The company intends to raise additional capital before eventually pursuing an initial public offering, according to sources familiar with its strategy. It is currently finalizing an extended Series C funding round, expected to exceed its original target, with completion anticipated within the next month.

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The startup, which employs approximately 150 people, including a small team of 15 in Silicon Valley, has already begun distributing samples of its chips to potential clients. Among them are LG AI Research, the artificial intelligence division of LG Group, and Saudi Aramco. According to sources, FuriosaAI has a broader pipeline of around a dozen companies evaluating its technology in the first half of this year.

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RNGD, the company’s latest chip, is manufactured using Taiwan Semiconductor Manufacturing Co.’s 5-nanometer process and incorporates high-bandwidth memory (HBM3) supplied by SK Hynix Inc. The chip is designed to offer high performance for AI inference tasks, making it a potential challenger in a market currently dominated by Nvidia and a few other AI-focused semiconductor firms.

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By rejecting Meta’s offer, FuriosaAI is positioning itself as a formidable player in the AI chip industry. Rather than integrating into a tech giant’s ecosystem, the company aims to build its own brand and expand its reach through strategic partnerships and independent growth. Its ability to attract major clients like LG AI Research and Saudi Aramco highlights its growing influence in the AI hardware sector.

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The decision to remain independent comes at a time when AI chipmakers are in high demand, with global tech firms racing to secure access to advanced processing power. Nvidia continues to dominate the industry, but rising competition from startups like FuriosaAI signals a shift in the landscape. While an acquisition by Meta could have provided the startup with substantial resources, the company appears confident in its ability to thrive on its own.

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Looking ahead, FuriosaAI’s focus will likely be on scaling production, expanding its customer base, and securing additional funding to fuel its ambitions. If its Series C funding round surpasses expectations, it will further validate the company’s strategy of independent growth. Investors will be watching closely to see whether FuriosaAI can carve out a sustainable niche in the AI semiconductor market, particularly against established players with deep financial resources.

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As the industry continues to evolve, FuriosaAI’s decision to reject Meta’s bid underscores the increasing importance of AI chipmakers in shaping the future of artificial intelligence. With demand for AI processing power surging, the startup’s bold move to stay independent could position it as a key player in the next generation of AI hardware.

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