Oracle Corporation, which already owns a 29% stake in Ampere Computing, a startup specializing in the development of Arm server processors, may use future investment options to gain control over it, Bloomberg writes. This became known from a regulatory document sent by Oracle to the regulator this week.
It said that in addition to its equity interest in the startup, Oracle invested $600 million in convertible debt securities issued by Ampere during the fiscal year ended May 31, 2024, after purchasing $400 million of such securities in fiscal 2023. The debt matures in June 2026. If options to acquire an additional stake in the startup’s capital are exercised by January 2027, Oracle “will gain control of Ampere,” according to a document prepared by Oracle.
Image Source: Ampere
The document also announced that Ampere founder and CEO Renee James, as well as James Vishal Sikka, founder and CEO of Vianai Systems, will leave Oracle’s board of directors and will not stand for re-election at the annual meeting of shareholders on November 14. As a result, the composition of the board of directors will be reduced from 15 to 13 people. Jamesya joined Oracle’s board of directors in December 2015, and Sikka joined in December 2019.
Ampere estimates that 95% of Oracle’s services currently use its CPU, and the company recently agreed to a partnership with Uber. However, Oracle said in the document that it had reduced its purchases of Ampere chips. The company has placed an upfront order for Ampere processors in the amount of $104.1 million in fiscal 2023. As a result, she received chips worth $4.7 million directly and $43.2 million through intermediaries. In fiscal 2024, it purchased $3 million of Ampere chips directly, but did not purchase anything through distributors. At the moment, Oracle’s upfront payment for the chips is $101.1 million.
Regarding its stake in Ampere, Oracle said that “the total carrying amount of its investment in Ampere, after accounting for equity method losses, was $1.5 billion as of May 31.” Earlier it became known that Ampere is no longer planning an IPO in the near future and is exploring the possibility of its sale to a major market player.