Intel Corp. (NASDAQ: INTC) agreed to acquire deep learning and artificial intelligence (AI) startup Nervana Systems, reportedly for a price ranging from $350 million to $400 million.

Nervana is expected to continue all existing development efforts including the Nervana Neon deep learning framework, Nervana deep learning platform, and the Nervana Engine deep learning hardware.

Founded in 2014 and headquartered in San Diego, Calif., Nervana has a fully-optimized software and hardware stack for deep learning. the startup previously raised $24 million in venture funding from DFJ, DCVC, Playground Global, CME Ventures, Lux Capital, Allen & Co, AME Cloud Ventures, Fuel Capital, Omidyar Technology Ventures, SV Angel and other investors.

“We will apply Nervana’s software expertise to further optimize the Intel Math Kernel Library and its integration into industry standard frameworks. Nervana’s Engine and silicon expertise will advance Intel’s AI portfolio and enhance the deep learning performance and TCO of our Intel Xeon and Intel Xeon Phi processors,” said Diane Bryant is executive vice president and general manager of the Data Center Group at Intel.

“The combination of Nervana’s technology and expertise incorporated into Intel’s portfolio will take deep learning/AI solutions to the next level. We will continue to operate out of our San Diego Headquarters and will retain our talent, brand, and start-up mentality,” said Nervana CEO and co-founder Naveen Rao.

Intel processors power over 97% of servers deployed to support machine learning workloads today. The Intel Xeon processor E5 family is the most widely deployed processor for deep learning inference and the recently launched Intel Xeon Phi processor delivers the scalable performance needed for deep learning training. While less than 10% of servers worldwide were deployed in support of machine learning last year, the capabilities and insights it enables makes machine learning the fastest growing form of AI, according to Intel.

“At Intel we believe in the power of collaboration: the goodness inherent in exchanging fresh ideas and diverse points of view. We believe that bringing together the Intel engineers who create the Intel Xeon and Intel Xeon Phi processors with the talented Nervana Systems’ team, we will be able to advance the industry faster than would have otherwise been possible. We will continue to invest in leading edge technologies that complement and enhance Intel’s AI portfolio,” Bryant added.

“The venture world doesn’t often get excited about a chip company these days but Naveen and the Nervana founding team’s audacious plan to build a deep learning compute fabric that would take AI to the next frontier had us captivated from day one,” said Steve Jurvetson, managing partner, DFJ.

“Nervana is a testament to the magic of best in class technical teams coming together with a shared vision. We look forward to seeing this talented team build the compute architecture powering the next generation of intelligent applications as part of Intel,” said Todor Tashev, managing partner, Omidyar Technology Ventures.

The deal is subject to regulatory approvals and customary closing conditions. Allen & Company LLC acted as financial advisor to Nervana in this transaction.

The move follows last week’s Apple Inc. (NASDAQ: AAPL) acquisition of Seattle-based machine learning startup Turi Inc. for a reported $200 million.

“Technology companies are hurriedly snapping up startups in the field of artificial intelligence,” noted noted The Wall Street Journal, referring to “a buying spree fueled by one of the hottest trends in the tech sector.”

In contrast, in June Intel was said to be seeking an exit strategy for Intel Security, the antivirus software maker formerly known as McAfee, which Intel acquired for nearly $7.7 billion in 2011, signaling a fundamental change in strategic focus and market trends.

Photo: Intel’s Data Center EVP & GM Diane Bryant, with Nervana’s Co-Founder & CEO Naveen Rao.

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