Microchip Technology Acquires Israeli AI Chip Startup Hailo to Expand Edge AI Portfolio

The financial terms of the deal have not been revealed, but industry experts believe the purchase price is much lower than Hailo's earlier valuation.

The acquisition comes after a difficult period for Hailo. The company faced serious financial problems, took emergency loans, reduced its workforce, and saw its planned merger with a Special Purpose Acquisition Company (SPAC) fail after its valuation dropped below $500 million.

Microchip's acquisition gives Hailo a new opportunity to continue developing its AI technology under a larger global semiconductor company.

The acquisition is a mixed ending for Hailo. The Israeli startup was founded in 2017 and raised around $340 million from investors, including the Zisapel family, OurCrowd, Alfred Akirov, and Delek Automotive. At its peak, the company was valued at more than $1 billion.

One of Hailo's biggest investors, Delek Automotive, provided emergency funding to help keep the company running during its financial difficulties. However, Delek has already said it will write off most of its investment in its upcoming financial report, meaning the acquisition will not stop the company from recording a major financial loss.

"The acquisition of Hailo accelerates Microchip's expansion into high-performance edge AI processing," said Mark Reiten, Senior Corporate Vice President at Microchip. "Hailo's AI acceleration, advanced vision processing and software ecosystem directly complement Microchip's embedded processing, FPGA, connectivity, security, power and analog portfolio. Together, we can help customers build more capable intelligent edge systems with the right balance of performance, power efficiency, reliability and system cost."

"Joining Microchip would give Hailo the opportunity to scale our accelerated Edge AI technology through a global embedded systems leader," Danon said. "Microchip's customer reach, channel scale and broad technology portfolio would create a strong platform for bringing advanced vision processing and AI acceleration to a broader range of intelligent edge applications."

The Hailo acquisition is another important step in Microchip Technology's AI growth strategy. Earlier, the company strengthened its AI business by acquiring Neuronix AI Labs, which develops technology to improve how AI and machine learning models run on FPGAs and system-on-chip (SoC) devices.

With Hailo joining the company, Microchip gains Edge AI processors, computer vision chips, and AI software tools. These technologies will expand Microchip's AI product portfolio and help it offer more advanced solutions for smart edge devices.

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