Amazon is doubling down on the secretive chip startup it bought for $350 million 2 years ago

Amazon CEO Jeff BezosBrent LewisAmazon CEO Jeff Bezos

Amazon may be planning for a major expansion in Israel, with a big part of its resources going to Annapurna Labs, the secretive Israeli chip making startup it bought for $350 million in 2015, according to Haaretz’s Eliran Rubin.

The report says the expansion includes a new 32,000 square foot (3,000 square meter) R&D facility that would have about 800 employees within the next two years. Annapurna Labs, which employees about 200 people now, will be the “basis” for Amazon’s upgrade plan in Israel, it says.

In fact, the report says Amazon CEO Jeff Bezos even made a secret visit to Annapurna Labs recently to meet with its management and staff members, underscoring the growing importance of the region to the company.

It’s unclear what exactly Amazon wants to do with the team at Annapurna Labs. Although it was founded in 2011, Annapurna Labs’ work has mostly been under wraps, often being called a “secretive” chip designer. It only has one press release on its site, which is about an ARM-based chip targeting low-cost servers and Internet of Things devices.

One of the job listings for Annapurna Labs may give a better clue to what it plans to do in the future. It says Annapurna Labs is now part of Amazon Web Services, and is looking for “exceptional engineers to help develop the next generation chips based on a revolutionary architecture.”

When Amazon made the acquisition in 2015, the deal was speculated to be a move aimed at eventually lowering the cost to run its cloud data centres. Amazon mostly relies on custom chips made by Intel, but having an alternative option like ARM — although believed to be far behind Intel’s server technology — could potentially help drop some of its costs.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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