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MGX joins Silver Lake in Altera majority investment: Abu Dhabi AI investment firm MGX has joined private equity firm Silver Lake as a co-investor in its acquisition of a majority stake in Altera, Intel’s programmable chip unit, according to a press release. Intel will retain a 49% holding.
What we know: The value of MGX’s investment was not disclosed, however the transaction, completed on 12 September, saw Silver Lake take majority ownership at an equity value of around USD 3.3 bn when factoring in debt financing, according to regulatory filings cited by Reuters.
BACKGROUND- Intel agreed in April to sell 51% of Altera to Silver Lake in a transaction valuing the unit at USD 8.75 bn, according to regulatory filings — less than half the USD 17 bn Intel paid in 2015.
In context: Intel has been struggling to keep its market edge amid a shift towards AI in the industry and in the face of rising competition in recent years, Reuters reported elsewhere. This prompted the US government to buy a 9.9% stake in Intel last month for USD 8.9 bn in an effort by US President Donald Trump to boost American manufacturing amid rising global competition.
More on Altera: Headquartered in California, Altera manufactures chips for use in sectors like data centers, telecoms, and robotics, and its offerings include semiconductors that can be reprogrammed after post-production.
REMEMBER- The UAE has been looking to secure easier access to US semiconductors, while MGX has focused on backing AI startups like OpenAI and xAI, as well as backing major AI infrastructure projects like Microsoft and BlackRock’s USD 30 bn global AI infrastructure fund.
“Altera provides a foundational platform for next generation computing,” MGX’s chief investment officer, Omar Alismail, said. “This is an opportunity to scale a company of such significance into a true global leader for the AI era.”
This isn’t Silver Lake’s first tie-up with Emirati heavyweights, having previously invested alongside MGX in Khazna Data Centers, as well as with Abu Dhabi sovereign wealth fund Mubadala to take NYSE-listed entertainment agency Endeavor private.
