Finnish startup community CEO Riikka Pakarinen and Aalto University professor Vesa Puttonen comment on Silo AI’s acquisition

CEO of the Finnish startup community Riikka Pakarinen and Aalto University professor Vesa Puttonen consider the acquisition of Silo AI as proof that small Finland has a lot to offer in the field of artificial intelligence.

Spectacular thing,” says the CEO of the Finnish startup community Riikka Pakarinen From Silo AI’s store.

American semiconductor manufacturer AMD was reported earlier on Wednesday buying the Finnish artificial intelligence company Silo AI for 614 million euros.

CEO of the Finnish startup community Riikka Pakarinen

“When it comes to artificial intelligence, we are talking about a large global market. If little Finland is able to produce such a desired company, then it speaks of know-how.”

According to Pakarinen, the field of artificial intelligence could be a source of pride for Finland in the same way as the gaming industry.

Finland has a lot of artificial intelligence expertise and promising growth companies. Silo AI’s deal will turn the eyes of international investors to Finland, Pakarinen says.

Attention also helps to attract international talent, which, according to Pakarinen, is key to the continued success of Finnish companies.

Also Professor of finance at Aalto University Vesa Puttonen considers the trade a great achievement.

“It’s great that there are shops of this size in a country the size of Finland,” says Puttonen.

Vesa Puttonen, professor of finance at Aalto University

Puttonen notes that the deal is on the list of the biggest growth company deals in Finland.

In addition to Wolt and Supercell’s billion dollar deals, Puttonen highlights the game company Small Giant Games sales to the American Zynga in 2018. The gaming company was sold in two parts for a total of 610 million euros.

“Both are examples that there is something in Finland’s innovation system that works, even if sometimes we paint dark pictures on the subject.”

According to Puttonen, the large purchase price in relation to the size of the turnover is explained by the strong artificial intelligence boom. Growth companies in a hot sector pay for future expectations.

In 2023, Silo AI had a turnover of around 15 million euros.

Puttonen according to the current logic of the business world, companies like Silo AI are sold as part of large foreign companies instead of being allowed to grow independently. Large companies can offer growing companies resources, money, distribution channels and a product development budget.

“The development in this field is so fast that the logic is that at some point you should jump under the wings of bigger ones in order to keep up with the competition.”

According to Puttonen, the traditional path, where the company first collects money from financiers through financing rounds and then goes public, is no longer such an attractive choice for growth companies.

“Listing involves regulation [sääntelyä], and public pressure is strong. You can work more calmly under the wings of a large company, and you don’t have to explain disappointing results in connection with interim reports,” says Puttonen.

“It would have been great to see Wolt, Small Giant Games or Silo as a Finnish listed company, but that’s romantic thinking.”

Because the company’s know-how will still remain in Finland, according to Puttonen, the acquisition could be a winning solution from Finland’s point of view as well.

Pakarinen also reminds that even if the ownership of the company is transferred to the United States, the transaction amount paid to Finland is often transferred as investments to other domestic companies.

“This is a good example that investment brings good companies”, says Pakarinen.

“Silo AI has done groundbreaking work.”

By Editor

Leave a Reply