The deal is worth $1.9 billion, but a fully programmable processor is different from the field-programmable arrays (FPGAs) that AMD has just got its paws on through its recent Xilinx buy.
FPGAs are suitable for managing security networking or data processing but need additional hardware for some services. With Pensando, AMD gets another type of IP: programmable processors and application software that operates it.
Word on the street is that AMD is less interested in the hardware but wants Pensando's software. The solutions platform includes a "programmable packet engine and complete software stack that accelerates networking, security, storage and other services for cloud, enterprise and edge applications."
AMD says that with the addition of Pensando, the company will have the capability to innovate at the "chip, software and platform level and deliver optimised solutions with unmatched performance and value for our cloud and enterprise customers."
An AMD statement said: "The combination of our CPUs, GPUs, FPGAs, and adaptive computing engines with Pensando's packet processor and software technologies will enable AMD to offer a broad portfolio of compute engines that have been optimised for different workloads," a statement by AMD says. "We believe this will be a critical requirement to deliver the performance, power efficiency and capabilities required to power the next generation of accelerated data centres at scale."
There are other reasons why AMD is particularly interested in Pensado, as it is interested in any other enterprise-related companies: margins, quotes, and allocations at foundries. Selling high-end CPUs for servers and desktops enables AMD to post a ~50 per cent gross margin, which is good enough to compare to other fabless companies but not good enough to match Nvidia. Datacentre products bring in higher margins and higher prices.