Advanced Micro Devices (AMD) has announced plans to acquire cloud startup Pensando for $1.9 billion.

Upon completion of the deal, AMD will expand its processor and graphics chip line to include Pensando’s platform, with the deal expected to close in the second quarter of 2022.

Pensando CEO Prem Jain and the entire team will join AMD Data Center Solutions Group. AMD said the transaction value does not include working capital and other adjustments.

Founded in 2017 by a group of four former Cisco Systems engineers, Pensando produces a fully programmable processor and software platform.

These services offered by Pensando help corporate customers and data center customers to function more like cloud computing data centers.

Pensando’s software also takes on the mechanics of transferring the data to the right physical machines.

There is fierce competition in the data center chip business, with the semiconductor industry’s three heavyweights, AMD, Intel and Nvidia, remaining cautious in their search for customers from private organizations and government.