There have been many acquisitions in the VR and AR space in both the hardware and software in the least 24 months, but none of them could have been less expected than the one Advanced Micro Devices did today with Nitero. Today AMD announced the company acquired the IP and acquihired all the employees of Austin-based Nitero. Nitero co-founder and CEO Pat Kelly has joined AMD as corporate vice president, Wireless IP. AMD has made fewer acquisitions compared to their contemporaries as of late, I believe primarily because of their balance sheet. This is also a bit of a surprise as AMD is a processor and IP company that develops desktop, notebook, server, and console processors and SoCs as well as graphics processors, but never wireless chipsets. While we don’t know the terms of the acquisition, it appears to make strategic sense given AMD’s investment into VR and AR with Radeon and Ryzen and the needs of the market for an untethered, higher-resolution experience. I can think of a few scenarios of what Advanced Micro Devices will do with the IP and they’re very interesting, but AMD is making it clear they won’t enter the HMD space.
Austin-based Nitero is one of the few companies in the world capable of supplying 60 GHz mmWave radio technologies for something like wireless VR. While VR hadn’t grown as quickly as many expected in 2016, demand for Nitero’s capabilities has only been growing as the industry moves away from wired VR and AR. AMD was one of the first if not the first big chipmaker to make a significant bet on VR and publicly invest in and promote VR, so, it doesn’t seem like that much of a stretch to think that they would want to increase their commitment to the space by acquiring another chip maker in the space.
AMD is also facing pressure from some of their competitors like Intel and Qualcomm who already have wireless divisions and 60 GHz technologies for VR. The wireless VR pipeline is increasingly dependent on the wireless chips on both ends and the GPU that does the processing. If AMD were able to more tightly integrate Nitero’s chips with their GPUs either in hardware or software, we could potentially see increased VR performance. That increased performance could translate to support for things like 4K per eye resolution or even higher resolutions like 16K which AMD has said in the past would bring photo-realistic VR.
This acquisition of Nitero’s IP really comes down to the fact that AMD wants to take more responsibility and control of the VR experience. By doing that, AMD also ensures their seat at the table as we know that Nitero is very engaged with many HMD makers and the VR ecosystem like Valve to enable wireless capabilities soon, as in 2018. The acquisition could also allow AMD to claim their technology is inside of many of the HMDs, something many of their competitors cannot. AMD can also use this acquisition to forge closer relationships with HMD makers to optimize even more for their GPU technologies as well as their new found wireless technologies.
It will be very interesting to see how this acquisition pans out long term, especially if Nitero ends up becoming the primary supplier of VR and AR wireless chip technology. AMD looks like it is following the pixels with this acquisition and I hope the company can continue to move those pixels even more quickly and that this acquisition ends up better than some of their previous acquisitions like SeaMicro. Unlike SeaMicro, the Nitero IP acquisition is much, much smaller and more core to AMD's current run-rate business.
To be completely successful, the VR experience needs higher resolution, it needs to be untethered and it needs to cost less, and this is right up AMD’s alley.
