Nvidia Corp announced yesterday that it’s investing US$5 billion in Intel Corp and will collaborate with the struggling semiconductor company.
The two companies will team up to work on custom data centers that form the backbone of artificial intelligence (AI) infrastructure as well as PC products, Nvidia said in a statement.
Nvidia said it will spend US$5 billion to buy Intel common stock at US$23.28 a share. The investment, which is subject to regulatory approvals, comes a month after the US government took a roughly 10 percent stake in Intel.
Photo: Hector Retamal and Fabrice Coffrini, AFP
“This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms," Nvidia CEO Jensen Huang (黃仁勳) said in the statement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
The two companies said they will work on “seamlessly connecting” their architectures.
For data centers, Intel will make custom chips that Nvidia will use in its AI infrastructure platforms. While for PC products, Intel will build chips that integrate Nvidia’s graphics technology.
The agreement provides a lifeline for Intel, which was a Silicon Valley pioneer that enjoyed decades of growth as its processors powered the PC boom, but fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone’s 2007 debut.
Intel fell even farther behind in recent years amid the AI boom that has propelled Nvidia into the world’s most valuable company. Intel lost nearly US$19 billion last year and another US$3.7 billion in the first six months of this year, and expects to slash its workforce by a quarter by the end of the year.
Now it is forced to turn to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to produce its best chips. TSMC’s rapid improvements in technology have enabled many companies – from Apple Inc to Nvidia – to turn good designs into industry-leading products.
Under new CEO Lip-Bu Tan (陳立武), brought in earlier this year to replace the ousted Pat Gelsinger, Intel has said it will pursue a more open approach, seeking out partnerships and opening its plants to rivals.
“We appreciate the confidence Jensen and the Nvidia team have placed in us with their investment and look forward to the work ahead as we innovate for customers,” Tan said in the statement. “Intel’s x86 architecture has been foundational to modern computing for decades – and we are innovating across our portfolio to enable the workloads of the future.”
The deal between the two chipmakers comes as China moves to be less dependent on US semiconductor technology. This week, Chinese officials reportedly forbade several large domestic technology companies from purchasing Nvidia chips, and Huawei Technologies Co (華為) announced that it was expanding its development of AI chips and manufacturing.
In premarket trading yesterday, Intel shares jumped 30 percent. Nvidia shares added 3 percent.
Additional reporting by Bloomberg
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