It has been confirmed that M&A negotiations, which have been underway between artificial intelligence (AI) semiconductor design startup Puriosa AI and global big tech company Meta, have finally collapsed. Instead of selling its management rights, Puriosa AI has expressed its strong will to position itself as an alternative to Nvidia in the global AI semiconductor market.

According to the investment bank (IB) and the semiconductor industry on the 24th, Puriosa AI recently notified Meta of its intention to reject the sale. After experiencing below-expected performance in its own AI chip development, Meta has been seeking to acquire a foreign semiconductor company with technological prowess, and has started negotiations with Puriosa AI since early this year.

“Since October last year, Meta has been looking for several AI semiconductor companies in the U.S. and Israel, and has finally made Puriosa AI a viable acquisition target and negotiated it since the beginning of the year,” an official familiar with Puriosa AI said. “The two sides have failed to narrow their differences over the business direction and organizational composition after the acquisition rather than the price.

Meta’s proposed acquisition price is $800 million (about 1.2 trillion won), which exceeds the corporate value of Puriosa AI, which is being evaluated in the market, by about 400 billion won. In response, the official said, “There was a struggle within Puriosa AI over the proposal, but it is known that CEO Baek Joon-ho, the founder, did not accept the business scenario envisioned after Meta’s M&A.”

The semiconductor industry believes that Meta is focusing on securing Puriosa AI’s technology and professional manpower with the design of customized chips for its AI services in mind, rather than trying to enter the AI semiconductor market in earnest. A semiconductor industry official explained, “Meta approached Puriosa AI with greater interest in absorbing entire proven systems and technical talents for the purpose of implementing its AI services than AI semiconductor development business such as ‘Renigade’.”

Some said that Puriosa AI would sell due to financial difficulties, but the company reportedly raised stable funds in the previous bridge round.

Puriosa AI received a 30 billion won letter of intent (LOI) from the Korea Development Bank and plans to secure a total of 70 billion won worth of funds, including 12 billion won, from the Eugene Growth Fund within three to four weeks. This fund will be invested in the preparation and operation of Renegades for mass production.

Puriosa AI is currently working with major domestic and foreign companies such as LG AI Research Institute and Saudi Aramco to test the performance of its chip ‘Renegade’. Aramco is collaborating by selecting only four companies that have been recognized for their AI semiconductor competitiveness worldwide, and Puriosa AI is included as one of them.

Renegade is a second-generation AI semiconductor specialized in AI inference tasks, consuming only 25% of power compared to conventional GPUs while doubling performance efficiency. It is produced based on TSMC 5-nano process and is the first in the world to be equipped with two HBM3 memories to maximize computational performance. Another strength is that it can be driven at half the cost of Nvidia’s H100.

Puriosa AI plans to start mass production of Renegade from the second half of the year and establish a sales base in the AI semiconductor market. Earlier, in an interview with Maeil Economy, CEO Baek Joon-ho said, “Renigade’s commercial success is a key variable at the time of its IPO, and we are confident in Renigade’s success,” and stressed, “Furiosa AI is ready to change the paradigm of the AI semiconductor market through efficient solutions.”

CEO Baek is a semiconductor expert who was in charge of design in U.S. semiconductor company AMD and Samsung Electronics’ memory division, and founded Puriosa AI in April 2017. Currently, more than 90% of Purio’s AI employees are developers. It consists of doctoral-level personnel such as Massachusetts Institute of Technology (MIT) and former engineers from Google, Qualcomm, and Samsung Electronics.

The collapse of the sale negotiations is expected to have a meaningful impact on the overall AI semiconductor industry in Korea. Experts point out that as AI semiconductors have emerged as a national strategic industry, Korea’s competitiveness in AI semiconductors should be enhanced through significant policy support from the government.