IBM and AMD have entered into an agreement that will see the two companies work together on open-source software, security, artificial intelligence workloads, high-performance computing and confidential computing.

The collaboration between AMD and IBM is likely to cement AMD’s place in hybrid cloud environments and provide more data center footing in the enterprise. According to the recent AMD’s earnings report, the company is gaining momentum in cloud customers and data centers as it competes against Intel. AMD’s Enterprise, Semi-Custom, and Embedded segment third-quarter revenues were $1.13B, representing a 116% increase year-over-year and 101% quarter-over-quarter.

The two companies have been busy

The two companies have been busy, especially in acquisition deals where AMD acquired Xilinx for $35 billion, while IBM acquired Red Hat for $34 billion. This IBM’s acquisition of Red Hat was termed one of the largest deals by the company ever.

Lately, IBM announced that it would spin off its managed infrastructure unit in order to focus on hybrid cloud and Red Hat.

The collaboration will be easy

IBM and AMD are not strangers to each other. They are familiar with each other on several fronts. For example, Mark Papermaster, AMD Chief Technology Officer, is an IBM alum. Besides, the two companies have links to GlobalFoundries. It is this company that offered to manufacture AMD chips when it went fabless twelve years ago. GlobalFoundries later bought IBM’S processor business in 2014.

These companies are fit to work together. Specifically, IBM and AMD will make confidential computing, which encrypts data running on virtual devices, a priority. The companies will also work together to speed up AI workloads and HPC in hybrid cloud deployments and regulated industries.

The researchers from the two sides are now working together on joint development.