Nvidia has reason to be pleased with themselves with their masterstroke investment of $5 billion into Intel. This investment provides Nvidia with a 4% stake in the company, according to Reuters. This strategic partnership between the two companies is focused on improving coordination in the quickly growing fabless artificial intelligence (AI) chip industry. Regardless, Intel is being given generous odds to come back from behind in the AI chip race. At the same time, Nvidia has become the dominant player in this space.
Intel has had a rough ride of late, with leaders coming and going and an overall shift in operations. Under the guidance of its new CEO, Lip-Bu Tan, Intel is making concerted efforts to regain its foothold in the semiconductor industry. Tan’s appointment is a clear sign that the company is serious about revitalizing the company’s strategies as the firm looks to innovate and better compete against its promising rival.
Since then, Intel has undergone major leadership changes. To increase profit margins in the meantime, the company has undertaken several rounds of employee layoffs affecting thousands of employees. The company further stressed its commitment to disciplined capital expenditure with increased manufacturing projects to centralize operations. These measures reflect Intel’s intent to adapt to the competitive landscape shaped by companies like Nvidia.
In reality, the world’s leading semiconductor manufacturers can’t produce semiconductors fast enough. Nvidia, for example, just posted another record quarter of revenue. This milestone further solidifies its claim to be the most valuable company in the world by market cap. NVIDIA’s lead on AI and accelerated computing technologies have undeniably distanced it further from its industry compatriates.
The collaboration between Intel and Nvidia will utilize Nvidia’s NVLink interface, which facilitates data and control code transfers between CPUs and GPUs. This integration aims to combine the best of both companies’ products. It connects Intel’s data center and client computing platforms with Nvidia’s almost unchallenged AI muscle.
“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,” – Intel CEO Lip-Bu Tan
This partnership increases Nvidia’s investment in Intel. Maybe most importantly, it lets both companies leverage their strengths in what may soon be a dog-eat-dog competitive market. Through shared resources and expertise, they hope to accelerate the development of innovative AI technologies that could serve multiple industries.
