Why Did This AI Startup Reject Meta’s $800 Million Offer?

A South Korean AI start-up, FuriosaAI, has declined Meta’s nearly $800 million acquisition offer. According to the Bloomberg report, the company chose to remain independent and grow on its own. The start-up was reported to have been in talks with Meta since the beginning of this year, but the deal couldn’t be reached.

What Does FuriosaAI Do?  

FuriosaAI was founded in 2017 by June Paik, a former engineer at Samsung and AMD. The company specializes in developing semiconductors specifically designed for AI inference tasks. However, the company got attention recently due to its second-generation processor, RNGD (pronounced ‘Renegade’), which aims to compete with industry leader Nvidia’s offerings. It is built on TSMC’s 5-nanometer process. It is touted to provide significant power efficiency advantages—operating at a thermal design power of 150 watts compared to Nvidia’s H100, which can reach up to 1,200 watts. 

Moreover, the company has around 150 employees, 15 of whom are based out of its Silicon Valley headquarters. It also has some major clients on its list, like LG AI Research and Saudi Aramco. 

Why Did Meta Want to Buy FuriosaAI? 

AI is the thing of the future; every big tech giant is betting on it, and Meta is no exception. The company is aggressively expanding its AI infrastructure to compete with giants like OpenAI and Google and emerging companies like DeepSeek. Meta CEO Mark Zuckerberg has also announced that the company plans to allocate around $65 billion for its AI development in 2025. However, this number is expected to reach hundreds of billions in the coming years. 

Furthermore, Meta is also working on custom AI chips to improve its ranking and recommendation algorithms on Facebook and Instagram. In 2023, Meta launched its first AI inference chips and upgraded it in 2024. Acquiring FuriosaAI would have strengthened its AI chip strategy by integrating high-performance inference solutions into its ecosystem. 

What Will Happen Next? 

FuriosaAI is focusing on expanding independently and is preparing for a funding round before pursuing an eventual initial public offering. Sources indicate that its extended Series C round, expected to close within a month, is already exceeding its target.  

With increasing interest from global clients, FuriosaAI is positioning itself as a major player in the AI semiconductor space. By continuing to develop advanced inference chips, the start-up aims to challenge dominant players such as Nvidia and emerging competitors like Groq, SambaNova Systems, and Cerebras Systems.