Analog Devices approaches a $1.5 billion cash agreement for Empower Semiconductor's AI power chips.

      The Milpitas-based vertical power delivery company supplies over 3,000 amps of current directly beneath the GPU. An announcement regarding the acquisition could come as early as Tuesday.

      According to a report by Bloomberg on Tuesday, Analog Devices is in advanced negotiations to purchase the privately held Californian power management chip firm, Empower Semiconductor, for $1.5 billion in cash, citing sources familiar with the situation. A formal transaction could be announced by Tuesday, U.S. time.

      Neither company has publicly acknowledged the discussions officially.

      Empower's products are vital components in the development of AI data centers. Established in 2014, the Milpitas company designs integrated voltage regulators that are positioned directly under the GPU or other AI accelerators, delivering over 3,000 amps of current up through the printed circuit board instead of across it.

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      Empower's Crescendo platform, launched in October 2024, is often cited as the leading example of ‘vertical power delivery’ (VPD), which is an architectural evolution that major GPU manufacturers are adopting in their upcoming reference designs as power densities at the rack level surpass traditional lateral power configurations.

      The technical advantage that has positioned Empower in this category is clear: positioning the voltage regulator directly beneath the accelerator can reduce total system power consumption by approximately 20%, according to Empower's estimates, by eliminating the resistive losses associated with routing 3,000-amp currents laterally.

      For a hyperscaler operating tens of gigawatts of AI computing over a multi-year capital expenditure cycle, the potential operational savings are significant enough to make the underlying voltage-regulator intellectual property a strategic asset rather than a commoditized item.

      In late 2024, Empower raised over $140 million in a Series D funding round led by Fidelity Management & Research, with contributions from Maverick Silicon, CapitalG, Atreides Management, Socratic Partners, Walden Catalyst Ventures, Knollwood, and a subsidiary of the Abu Dhabi Investment Authority.

      The suggested $1.5 billion valuation for the anticipated Analog Devices acquisition represents a considerable increase from that funding round and reflects the revaluation that AI power suppliers aligned with hyperscalers have undergone through the spring.

      Analog Devices, a New York Stock Exchange-listed analog and mixed-signal company with a market capitalization of approximately $140 billion, has been strategically acquiring companies to bolster its AI infrastructure initiatives over the past two years.

      Empower would complement ADI’s power management division alongside its current voltage regulation offerings, with the strategic rationale being the acquisition of VPD intellectual property and design expertise, rather than merely manufacturing capabilities.

      It remains to be seen whether ADI intends to integrate Empower’s designs into its existing product roadmap or operate the acquired company as a separate entity focused on hyperscaler clients, which will be a notable detail upon the official announcement of the deal.

      The broader economic context has often been understated in financial media discussions. The capital expenditure commitments from major tech companies for 2026 now exceed $650 billion collectively from Microsoft, Alphabet, Amazon, Meta, and Apple, with most funds allocated towards AI data center infrastructure.

      The bottleneck has been progressively shifting upstream, from GPU supply concerns (exemplified by Nvidia's volume challenges in 2024) to data center site availability (the issue for 2025) and finally to power delivery architecture (the focus for 2026).

      This week’s $67 billion utility merger between NextEra and Dominion reflects the macro version of the same trade, while the ADI-Empower deal represents the chip-level equivalent.

      The competitive implications for the wider power semiconductor sector are what the rest of the industry will be monitoring closely. If the $1.5 billion valuation serves as the benchmark for a private VPD specialist with $140 million in disclosed prior funding and a Crescendo-class product, the resulting multiples for publicly traded power semiconductor peers (such as Vicor, Texas Instruments’ power management division, Infineon, and STMicroelectronics) are likely to be apparent in pre-market trading on Tuesday.

      Bloomberg’s report does not disclose the agreed multiple of Empower’s run-rate revenue or the anticipated closing timeline, only noting that a deal could be revealed "as soon as Tuesday."