NVIDIA acquires Intel x86 processors with NVIDIA RTX graphics

In a surprising turn of events, NVIDIA has acquired a stake in Intel worth $5 billion. This strategic move comes just weeks after the United States purchased Intel shares valued at $8.9 billion, amounting to a 9.9% ownership in the company. This acquisition not only reshapes the competitive landscape but also signals a potential shift in technological collaborations between two giants of the semiconductor industry.

NVIDIA's purchase price of $23.28 per share translates to a total of 5% of Intel being acquired. While these percentages may not grant absolute control over Intel, they do provide NVIDIA with significant influence in strategic decisions, especially when alliances are formed with other shareholders or when Intel's management seeks to maintain a positive relationship with influential partners.

NVIDIA's strategic stake in Intel: Focused on developing new SoCs with RTX graphics

As part of this unprecedented collaboration, NVIDIA and Intel have announced plans to develop multiple generations of custom products designed for data centers and personal computers. The goal is to enhance application performance and workload efficiency across various sectors including hyper-scale, enterprise, and consumer markets.

This partnership is set to natively connect both companies' architectures through NVIDIA's NVLink technology, which aims to merge NVIDIA's expertise in artificial intelligence (AI) and accelerated computing with Intel's CPU technologies and x86 ecosystem. In particular, Intel will be responsible for manufacturing custom x86 processors tailored for NVIDIA, which will be integrated into NVIDIA's AI infrastructure platforms.

On the consumer front, Intel will develop SoCs (System on Chips) with integrated NVIDIA RTX graphics. This means we can expect the emergence of powerful Super APUs that combine Intel's x86 processors with NVIDIA's state-of-the-art RTX graphics capabilities.

The future of Intel's graphics division: What lies ahead?

This development raises important questions about the fate of Intel's graphics division, particularly its GPU line, Intel Arc. These GPUs have shown remarkable performance, especially against AMD's offerings in the integrated graphics market. However, with NVIDIA's strategic investment and collaboration, the trajectory of Intel's graphics future appears to be shifting towards launching processors with NVIDIA's integrated graphics.

While this collaboration may initially benefit consumers by providing powerful integrated graphics solutions, it also poses the risk of diminishing Intel's role as a strong competitor to both AMD and NVIDIA in the long run.

Interestingly, NVIDIA's collaboration with Intel may coexist with its existing agreement with MediaTek, which focuses on creating SoCs featuring Arm CPUs and NVIDIA graphics. However, NVIDIA's push for high-performance variants suggests a clear intention to prioritize the combination of Intel's x86 processors with its own RTX graphics.

A significant announcement is expected later today, at 7 PM CEST, when both companies will provide more information about this partnership. Should there be any notable developments, further news will be released.

"AI is driving a new industrial revolution, reinventing all layers of the computing stack, from silicon to systems and software. At the heart of this reinvention is NVIDIA's CUDA architecture," stated Jensen Huang, founder and CEO of NVIDIA.

"This historic collaboration closely unites AI and NVIDIA's accelerated computing stack with Intel's CPUs and the vast x86 ecosystem, creating a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the groundwork for the next era of computing."

"Intel's x86 architecture has been fundamental to modern computing for decades, and we are innovating across our portfolio to enable the workloads of the future," said Lip-Bu Tan, CEO of Intel.

"Intel's leading platforms for data centers and client computing, combined with our advanced process technology, manufacturing, and packaging capabilities, will complement NVIDIA's leadership in AI and accelerated computing to enable new industry advancements. We appreciate the trust that Jensen and the NVIDIA team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business."

Implications of NVIDIA's Investment in Intel

This investment by NVIDIA could signal a major shift in the semiconductor landscape, impacting not only Intel but the entire industry. The cooperation between two tech giants can lead to:

• Enhanced Product Offerings: By leveraging each other's strengths, both companies can create more powerful and versatile products.
• Increased Market Competition: This collaboration may foster innovation across the board, pushing rivals such as AMD to enhance their offerings.
• Strategic Partnerships: Other companies may seek partnerships with NVIDIA and Intel to tap into their combined technologies.
• Focus on AI Development: With AI being a key driver of growth, the partnership could lead to breakthroughs in AI infrastructure.

Understanding the Financial Landscape: What is the value of Intel compared to NVIDIA?

The valuation of these two companies varies significantly, with NVIDIA's market capitalization soaring in recent years, especially due to its dominance in the AI and graphics markets. In contrast, Intel has faced challenges, including delays in production and competition from other chip manufacturers.

As of their latest financial reports, the market caps are as follows:

This disparity in valuation reflects the growing demand for high-performance computing solutions and the critical role that AI plays in shaping future technologies. The investment by NVIDIA could be seen as a strategic move to enhance its portfolio and gain a competitive edge in the market.

What does this mean for the future of NVIDIA and Intel?

The collaboration is expected to bring forth a new era of technological advancements that could redefine computing standards.

Some anticipated outcomes include:

• Innovative Product Development: Expect to see cutting-edge products that integrate advanced AI capabilities with traditional computing.
• Stronger Market Position: Both companies may solidify their positions as leaders in their respective fields.
• Consumer Benefits: Ultimately, consumers can expect improved performance and value from the products that emerge from this partnership.

As the tech world awaits further announcements from NVIDIA and Intel, this collaboration could mark a pivotal moment in the evolution of computing technology.

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