nvidia buys $5b stake in intel, planning ai chip collaboration

Nvidia and Intel Announce Strategic Partnership

A significant agreement has been reached between Nvidia and Intel, involving a $5 billion investment by Nvidia in Intel. This collaboration is designed to facilitate the joint development of future generations of products for both data center and personal computer markets.

Investment Details and Shareholding

Nvidia will be acquiring Intel stock at a price of $23.28 per share. This represents a modest reduction from Intel’s recent trading values. The transaction will position Nvidia as a substantial shareholder in Intel, holding approximately 4% of the company’s outstanding shares. Early trading on Thursday saw Intel’s stock value increase by as much as 30%.

Architectural Integration with NVLink

A key component of this partnership involves the integration of the two companies’ architectures. This will be achieved through the utilization of Nvidia’s NVLink interface. NVLink is designed to accelerate data and control code transfers between central processing units (CPUs) and graphics processing units (GPUs).

Compared to conventional standards like PCI Express, NVLink offers significantly faster data transfer rates. This enhanced speed is particularly critical for artificial intelligence (AI) applications, which often require the parallel processing capabilities of numerous GPUs handling substantial workloads.

Data Center Solutions

Specifically for data centers, Intel will be responsible for the manufacturing of a new series of x86 CPUs. These CPUs will be custom-engineered to support Nvidia’s AI infrastructure platforms. The resulting products will be targeted towards both enterprise-level and hyperscale customers.

Consumer PC Advancements

In the consumer PC sector, Intel will produce x86 system-on-chips (SoCs) that integrate chiplets from Nvidia’s RTX GPUs. This integration is expected to provide Intel with a competitive advantage over AMD’s CPU offerings.

Currently referred to as “x86 RTX SoCs,” these chips are anticipated to power a diverse range of personal computers.

Intel’s Recent Challenges

This deal arrives after a period of difficulty for Intel. The company has faced challenges in capitalizing on the growing demand for AI chips, unlike its new partner, Nvidia. Recent strategic moves by Intel included the appointment of a new CEO, workforce reductions, and the streamlining of manufacturing projects to improve financial performance.

Nvidia’s Continued Growth

Conversely, Nvidia has experienced a period of record-breaking success. It has emerged as the world’s most profitable semiconductor company and, based on market capitalization, one of the most valuable companies globally. During the same timeframe, Intel has struggled to maintain pace with shifting market demands, particularly the heightened requirements for semiconductors in AI applications.

This collaboration has the potential to enable Intel to regain market share from competitors such as AMD.

Executive Statements

“Intel’s leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable new breakthroughs for the industry,” stated Intel CEO Lip-Bu Tan.