NVIDIA purchases approximately 740 billion yen worth of Intel shares, and also announces joint development of 'Intel x86 RTX SOCs' for PCs equipped with NVIDIA graphics and chips for AI data centers
NVIDIA and Intel have announced a partnership to jointly develop AI infrastructure and personal computing products. As part of this strategic partnership, NVIDIA also announced that it will purchase Intel common stock at $23.28 per share, for a total of $5 billion. This surprise partnership between the two longtime rivals is expected to have a major impact on the entire technology industry.
NVIDIA and Intel to Develop AI Infrastructure and Personal Computing Products | NVIDIA Newsroom
NVIDIA and Intel to Develop AI Infrastructure and Personal Computing Products :: Intel Corporation (INTC)
https://www.intc.com/news-events/press-releases/detail/1750/nvidia-and-intel-to-develop-ai-infrastructure-and-personal
Nvidia and Intel's $5 billion deal is apparently about eating AMD's lunch | The Verge
https://www.theverge.com/report/781330/nvidia-intel-explain-5-billion-deal-jensen-huang-lip-bu-tan-amd
The partnership between NVIDIA and Intel focuses on two areas: data centers and PCs.
For data centers, Intel will reportedly manufacture customized x86 CPUs for NVIDIA. NVIDIA plans to integrate these into its AI infrastructure platform and offer them to the market. NVIDIA CEO Jensen Huang stated twice during an investor conference call that NVIDIA will become a 'major customer' for Intel CPUs and purchase Intel CPUs to power its rack-scale servers. The IT news site The Verge noted that this statement was 'a bit surprising,' given that NVIDIA has been independently developing CPUs using the Arm architecture for its own servers for many years.
For PCs, Intel plans to develop, manufacture, and bring to market new SoCs named 'Intel x86 RTX SOCs' that integrate NVIDIA's RTX GPU chiplets. These products will use the faster, higher-bandwidth NVIDIA NVLink interface to connect the CPU and GPU instead of the conventional PCIe.
The Intel x86 RTX SOCs will combine the strengths of Intel, which has a 79% share of the notebook PC CPU market, and NVIDIA, which has a 92% share of the gaming GPU market, and are expected to be primarily targeted at the thin and light gaming notebook PC and small PC markets. The release dates for each product have not yet been decided, but since the development of new processors usually requires a long lead time, it is likely that it will be at least a year, and possibly more, before they appear on the market.
The Verge points out that AMD has been actively developing the 'thin and light gaming laptop and small PC market.' AMD also holds nearly 40% of the server processor market, and the partnership between NVIDIA and Intel is expected to intensify market competition, including with AMD.
In addition, as part of this strategic partnership, NVIDIA also announced that it would purchase $5 billion worth of Intel common stock at $23.28 per share, giving NVIDIA an approximately 5% stake in Intel. The $5 billion deal is significant for Intel, which is struggling with negative free cash flow despite needing to make significant capital investments to compete with TSMC.
'This historic collaboration brings together two world-class platforms, tightly combining NVIDIA's AI and accelerated computing stack with Intel's CPUs and vast x86 ecosystem,' said NVIDIA CEO Jensen Huang.
Intel CEO Lip Vu Tang said, 'Intel's leading data center and client computing platforms, combined with our process technology and manufacturing capabilities, will complement NVIDIA's leadership and bring new breakthroughs to the industry.' Also, when asked during a Q&A session whether Intel and NVIDIA chips will be manufactured at Intel, he replied, 'Of course, we want to get approval for manufacturing. Then we'll determine whether it's appropriate to manufacture them at Intel's foundries.'
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