Analog Devices has acquired fellow US electronics company Alif Semiconductor for $1.35bn to add an AI-native processing platform for physical AI applications.

AI is entering a new phase as models move beyond interpreting words and images to understanding context and interacting with the physical world. This transition requires systems that can reason from signals such as motion, sound, vibration, radio waves and thermodynamics, and operate locally within demanding power, latency, security and reliability constraints.

Alif is redefining edge intelligence with a platform of high-efficiency AI-native microcontrollers and fusion processors. Its heterogeneous architecture enables real-time sensor fusion, low-latency inference and on-device AI, bringing intelligence to demanding physical systems.

Combining Analog Devices’ sensing, signal processing, power, connectivity and application software with Alif’s digital platform should accelerate the delivery of more complete physical AI offerings.

“AI is moving out of the data centre and into the physical world, where latency, power and trust cannot be compromised,” said Vincent Roche, CEO of Massachusetts-based Analog Devices (www.analog.com). “By combining Alif’s digital processing capabilities with our leadership in multi-modal sensing, signal processing, power, connectivity and software, we can empower customers to create entirely new classes of secure, intelligent systems that sense, reason and act locally in real time. This is the next frontier of AI: embodied and deterministic. This is physical intelligence in action.”

Reza Kazerounian, president of Alif, added: “Alif was founded to reimagine what a microcontroller can be in the AI era. We engineered a heterogeneous architecture from the start, integrating dedicated low-power neural processing with connectivity, security and intelligent power management that delivers compute resources precisely where they’re needed.”

Alif’s silicon is already shipping in production, with design wins across consumer and industrial users.

The acquisition has been approved by the boards of directors of both companies.

Alif Semiconductor (alifsemi.com), headquartered in Pleasanton, California, is a provider of secure, connected, power-efficient edge AI microcontrollers and fusion processors.