AMD puts $2.9B price on Toronto's Taalas, a top Canadian tech deal
What's the deal? AMD will pay about $2.9 billion for Toronto AI chip startup Taalas, according to a securities filing on November 4, making it one of the largest takeovers of a Canadian technology company. The cash-and-stock deal, announced in August without a price, includes up to $1.4 billion in contingent consideration tied to unspecified conditions.
Why now? The market for AI inference chips is heating up as cloud providers and businesses seek cheaper, more efficient alternatives to Nvidia processors for running models at scale. AMD plans to fold Taalas's silicon into its future Instinct products as it tries to catch up to Nvidia, which dominates the market.
What Taalas makes: Most AI chips are general-purpose. Taalas instead builds chips around a single model, etching its weights directly into the silicon. Its first product is a hard-wired version of Meta's Llama 3.1 8B, which the company claims runs about 10 times faster than the current state of the art at a 20th of the build cost and a tenth of the power.
Founded in August 2023 by former AMD executives Ljubisa Bajic, Lejla Bajic, and Drago Ignjatovic, the startup had raised more than $225 million in venture funding, including a $169-million round in February. Its November 2025 round implied a valuation of more than $750 million — making the AMD price a steep markup.
What's the endgame? "We founded Taalas to rethink AI inference from the ground up by building the hardware around the model," said co-founder and chief executive officer Ljubisa Bajic. AMD cites "a continued commitment to retaining and growing Canadian talent," and its Toronto-based chief software officer, Andrej Zdravkovic, said the Taalas team would join AMD's Canadian workforce. AMD already employs more than 3,800 people in Canada and has run a major office in Markham, Ontario, since buying ATI Technologies in 2006.
What could go wrong? The deal has not closed and still needs regulatory approval. Nearly half the price — up to $1.4 billion — hinges on conditions AMD has not disclosed.
The signal: It is a big payday for a chip startup less than three and a half years old, and a sign of how much major chipmakers will pay for AI inference technology. AMD's deal trails only EcolabDealroom has a profile for this one. Try Dealroom →'s $4.75-billion purchase of Calgary's CoolIT Systems among recent Canadian tech takeovers, and tops Nasdaq's $2.75-billion acquisition of Verafin in 2020. The team stays in Canada, but the company and its technology will belong to AMD.
Read more: thecircuit.ca, theglobeandmail.com
Image credit: Generated with Gemini
