AMD’s $1.9 billion acquisition of data processing unit (DPU) vendor Pensando better positions the company to compete directly against rivals Nvidia, Intel, and Marvell in the highly competitive data center market, analysts told SDxCentral Monday.

“Long viewed by many as an Intel copycat, AMD is proving it is more,” Forrester VP and research director Glenn O'Donnell said. “By acquiring Pensando and Xilinx, AMD is embarking on a product portfolio to add support to its core processor family and to distinguish itself as a more potent player beyond processors.”

For those that aren’t familiar, Pensando is one of several vendors competing in the emerging DPU market.

DPUs represent a broad category of hardware accelerators designed to offload input/output (I/O) intensive workloads, like those associated with networking, storage, and security applications, and are commonly associated with composable infrastructure.

While the role these devices serve varies wildly from vendor to vendor, most share a common promise: more efficient resource utilization and therefore reduced operating costs throughout the data center.

Pensando’s DPUs are no different. The company’s DPU technology combines a programmable ASIC with standard Arm processor cores, and it's packaged as PCIe expansion cards or embedded directly into appliances. Hewlett Packard Enterprise (HPE) Aruba’s CX 10000-series switches are one example with an integrated Pensando Elba DPU for greater scalability.

According to Pensando, this flexibility enables the company to address both hyperscale environments where every server might be equipped with a DPU as well as enterprise environments, where it might make more sense to consolidate those capabilities into a top-of-rack switch.

Pensando is no small player in this emerging market either. The company’s packet processors are widely deployed in enterprise and cloud data centers alike. The company counts Goldman Sachs, IBM Cloud, Microsoft Azure, Oracle Cloud, and HPE as customers.

The acquisition buys AMD a front row seat to the DPU market, Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told SDxCentral.

“I might be a little weary if I didn’t look at their customer list — and their customer list is impressive,” he said. “It’s one thing to say I’d love to go after a market, but you have somebody that's in it.”

Moorhead compared Pensando’s DPU and software-defined data center platform to Amazon Web Service’s Nitro platform. “I see this as the Nitro for everybody else, which is why Azure, Oracle Cloud, and IBM Cloud are on it,” he said.

While it remains to be seen how AMD will integrate Pensando into its broader data center strategy, Moorhead anticipates a tight integration between the chipmaker’s DPU families with AMD’s CPU and FPGA portfolios, including the potential for onboard I/O acceleration on future EPYC processors.

The deal is expected to close by the end of the second quarter of 2022 and will see AMD absorb Pensando's staff into its data center business unit.

The acquisition comes as the DPU market reaches a fever pitch. Over the past year, Marvell, Xilinx, Fungible, Intel and Nvidia have all brought new DPUs — sometimes called smartNICs or infrastructure processing units (IPU) to market.

Nvidia’s third-generation BlueField DPUs, announced last spring, promise to offload up to 300 CPU cores worth of I/O tasks and will be capable of running the entire VMware ESXi virtualization stack when they launch later this year.

Intel launched its next-gen IPUs codenamed Mount Evans and Oak Springs Canyon during its annual Architecture Day last summer. The IPUs launched alongside an updated acceleration development platform called the N6000.

Fungible, meanwhile, continues to push its composable infrastructure vision with a variety of appliance and PCIe-based DPUs.