NVIDIA to invest $ 5 billion in Intel Competition
NVIDIA, the leading company in the field of artificial intelligence chips, said it will buy a $ 5 billion (4 billion pounds) stakes in Intel – a lifeblood for its troubled rival in the wake of a separate investment from the United States government.
The deal, which was announced on Thursday, will include a partnership between the two American companies to make computer chips and a personal data center, with continued demand for artificial intelligence and companies seek to operate huge data centers.
NVIDIA will make one of the largest Intel shareholders, with about 4 % stake in the dirham semiconductor company.
Intel shares increased by more than 25 % on the deal news, which may boost the dominant chips maker. The shares in NVIDIA increased about 3 %.
In recent years, Intel has struggled to build more chips. It has failed to compete, which dominated the mutation of artificial intelligence by offering decisive chips to develop technology.
The market ceiling in NVIDIA has increased beyond $ 4 trillion, while Intel’s had reached about $ 100 billion.
NVIDIA CEO of NVIDIA said in a statement that the new cooperation represents “a mixture of two global platforms.”
“We will together expand our ecosystems and lay the foundation for the next era of computing,” added Mr. Huang.
Gil Luria, head of technology research in Da Davidson, said NVIDIA is excited to invest in Intel to diversify some production away from other competitors – especially TSMC Taiwan, Gil Loror, head of technology research in Da Davidson, said. Mr. Louor said that the chips giant is “now in investing in other companies in the environmental system of Amnesty International in order to maintain the momentum of emerging technology.”
He added that NVIDIA also seeks to “support the American administration because it tried to support the only American company capable of producing chips in the United States.”
In late August, the Trump administration announced that the federal government will get a 10 % stake in Intel.
At that time, Trade Minister Howard Lootnick described the investment in the White House as a “historic” agreement “that strengthens the American leadership in semiconductors, which will grow our economy and help secure the advantage of American technology.
The Trump administration’s announcement came after Intel became a target for US President Donald Trump. The CEO of Intel was accused of problematic relations with China and invited him to resign, although Mr. Tan described accusations as “wrong information”.
In response to the latest investment from NVIDIA, Mr. Tan said: “We appreciate the confidence that Jensen and the NVIDIA team set us.”
INTEL semiconductor was one day an important part of the popularity of personal computers. But the company has failed to maintain its hegemony in Silicon Valley during the past two decades. She recently achieved a success of her struggles to benefit from AI’s increase, unlike NVIDIA’s success.
The American chip makers’ partnership comes against the background of the challenges in the Chinese market. NVIDIA is struggling with its sales to China, where the country seeks to increase the production of local chips.
NVIDIA also found itself at the intersection of the American -Chinese trade war – geopolitical tensions that weigh their sales. Mr. Huang said this week that he is “disappointed” because China has ordered the best technology companies to stop the purchases of the company’s artificial intelligence chips.
Ray Wang, a semiconductor analyst at the Futurum Group Group, noted that the new NVIDIA share in Intel does not seem to include an investment in the field of contracting in Intel – part of the company that makes chips for other companies. Intel may not get a batch that affects the need for this part of its work.
Mr. Wang added that other competitors in the chips sector – especially AMD and TSMC – will suffer from the deal.