Fresh off of acquiring hollow core fiber firm Lumenisity, Microsoft is believed to have picked up DPU firm Fungible.

Data processing units (DPUs) are a relatively new class of programmable processor that manages how data moves through a data center, offloading networking tasks and helping optimize application performance.

fungible DPU.jpg
– Fungible

Fungible was founded in 2015 as the first company to pitch such a product to the cloud, and managed to raise over $370 million.

But the company, co-founded by the founder of Juniper Networks, struggled as larger players entered the market, including Nvidia, Intel, and AMD. Lightbits, Liqid, and GigaIO also took market share.

This August, the company laid off staff as its sales slowed and its cash piles dwindled. SemiAnalysis reports that the company initially tried to sell itself to Meta, but failed.

It was in talks with Microsoft for a custom silicon deal, but as its options narrowed, it sold to the company for a fire sale price.

Blocks&Files has also reported the acquisition, and says that it understands Microsoft has no interest in selling Fungible’s kit to external customers.

Microsoft declined to comment on the acquisition, and Fungible did not respond to requests for comment.

"A Data Processing Unit (DPU) was proposed to resolve the top three problems in data centers," said Fungible founder Pradeep Sindhu in an article for DCD in 2021. "Data-centric computations are ubiquitous but are performed poorly by general-purpose CPUs; network utilization is low (typically less than 30 percent); the configuration, control, and telemetry interfaces to servers are inconsistent and ad-hoc."

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