Episode 30: P.A. Semi + AuthenTec

**Ben Gilbert** (0:30)
Let's go to the podcast about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:34)
I'm David Rosenthal.

**Ben Gilbert** (0:35)
And we are your hosts. Today's episode, we're covering two acquisitions that we believe go together nicely. Apple's acquisition of PA. Semi and AuthenTec. We think it's a really nice way to mark the 10th anniversary of the iPhone, just a few weeks ago. These acquisitions led Apple's A series chips inside the phone and the TouchID sensor, which have a nice confluence where they work together well.

**David Rosenthal** (1:00)
Indeed.

**Ben Gilbert** (1:01)
David, how are you doing today?

**David Rosenthal** (1:03)
I am doing good. I am in cold but sunny Boston today.

**Ben Gilbert** (1:07)
Hey, I'm in cold but cloudy Seattle.

**David Rosenthal** (1:11)
It's kind of crazy that this is episode 30 I feel like we need like a birthday party for Acquired or something. We're getting old.

**Ben Gilbert** (1:17)
I know. I know. Well, I'm marking it by being highly, highly caffeinated. And for listeners, most episodes, we record in the evenings and today I'm recording from home. David's recording from the road and sipping coffee.

**David Rosenthal** (1:31)
Morning show.

**Ben Gilbert** (1:32)
Yeah. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (1:39)
So Crusoe, as listeners know by now, is a clean compute cloud provider, specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:04)
Yes. We talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (2:10)
The other element that makes Crusoe special is the environmental angle. Crusoe of course locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, et cetera, and uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:28)
Yep. obviously, it's a huge benefit for the environment and for customers on cost since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (2:44)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:01)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's crusoecloud.com/acquired, or click the link in the show notes.

**David Rosenthal** (3:18)
All right. Should we dive into it with the history and facts?

**Ben Gilbert** (3:22)
I think so. I just want to throw in a quick note before we dive in. We want to say if you've been a listener of the show for a long time, or if you're new to the show and like the episode, we would love a review on iTunes.
We'd really appreciate sharing with your friends on Twitter, Facebook, LinkedIn, emailing out to your company, whatever you feel is appropriate. It's how we grow the show and it's how we get new listeners. Also want to let everyone know we have a Slack channel. We talked about it a lot at earlier episodes in the show, but haven't mentioned it in a while. There's over 400 of us in the Acquired community hanging out and talking about deals that happen in real time that are too recent to cover on the show. Talking about past episodes, sharing tips, posting jobs, all sorts of things. So join us if you go to Acquired.fm, you can join the Slack there.

**David Rosenthal** (4:07)
Yeah, awesome. Look forward to seeing many of you in there. All right, let's dive in. So I'm going to start with PA. Semi, which was funny when we were chatting about preparing for the show. Ben was like, oh yeah, weren't they based in Israel or something? I was like, I don't think so. And then I looked it up, and it turns out that PA. Semi was founded in 2003, and it was originally called Palo Alto Semiconductor. But then right after they were founded, they moved to Santa Clara. So rather than changing the name, they just decided to go by PA. Semi, because they were no longer in Palo Alto, but right down the street. So the founder of the original Palo Alto Semiconductor, was actually kind of a celebrity in the chip design industry called Dan Dobberpuhl. I hope I'm pronouncing that right. But he had been a lead chip designer way back in the 70s and 80s for DEC, and had become kind of a celebrity in the field. He actually wrote a leading textbook that talked about chip design that was used at colleges all across the country. And he worked first on the DEC Alpha chip while he was there in the 70s and 80s. And then he got involved in the ARM world and built DEC's, built the team actually in, moved to California and built the team in California for DEC that made the strong ARM processors, which were sort of higher powered versions of processors based on the ARM chipset. And they tried to commercialize it and thought maybe, you know, sort of mobile devices might be an application for this, this was in the mid 90s, couldn't make it work.