Adds details about deal, background on Ampere

By Stephen Nellis

March 19 (Reuters) - SoftBank Group Corp 9984.T said on Wednesday it would acquire Ampere Computing, a U.S. chip startup founded by the former president of Intel INTC.O that is increasingly focused on artificial intelligence, in a $6.5 billion all-cash deal.

Ampere makes data center central processing unit $(CPU.AU)$ chips based on a computing architecture from Arm Holdings ARM.O that are used by firms such as Oracle ORCL.N in their cloud computing infrastructure.

As part of the deal, Ampere's biggest investors, Oracle and Carlyle Group CG.O, will sell their respective positions in the company, SoftBank said in a statement.

Founded in 2018 by Intel veteran Renee James, Ampere built CPUs with its own custom computing core technology, a step usually only taken by much larger firms like Apple AAPL.O or Qualcomm QCOM.O.

But Arm ultimately became a competitor as it sought to work directly with customers such as Microsoft MSFT.O and Google GOOGL.O to help them build their own custom Arm-based CPUs.

Google had adopted Ampere's chips, but a year later after Google worked with Arm to develop its own "Axon" CPU, a Google executive told Reuters it would not be deploying more Ampere chips.

Under SoftBank's ownership, Ampere will be a stable mate of Arm in the Japanese conglomerate's growing collection of chip technology companies that are boosting their focus on AI. SoftBank is the majority owner of Arm.

"With a shared vision for advancing AI, we are excited to join SoftBank Group and partner with its portfolio of leading technology companies," James said in a statement. "This is a fantastic outcome for our team, and we are excited to drive forward our AmpereOne roadmap for high performance Arm processors and AI."

(Reporting by Harshita Meenaktshi in Bengaluru and Stephen Nellis in Santa Clara, California; Editing by Alan Barona and Jamie Freed)

((HarshitaMeenaktshi.R@thomsonreuters.com))