Amazon Buys Networking IC Firm

Amazon has bought Annapurna Labs of Israel in what is assumed to be a move to develop its own networking ICs.

Although it is not publicly revealed, it is assumed that Annapurna is developing networking chips because that is what its founder Avidor Willenz did at Galileo which he sold to Marvell for $2.7 billion.

Amazon is thought to be bringing its server design in-house because it is concerned about the rising cost of networking.

Amazon server supremo James Hamilton told a conference last year “The cost of networking is escalating relative to the cost of all other equipment. It’s anti-Moore. That’s a big problem.”

Cost of the Annapurna purchase is thought to be in the $350 million to $375 million range.