Nvidia Pours Massive Funds into Intel's Operations
In a significant move for the tech industry, Intel and Nvidia have announced a collaborative effort to develop next-generation chips. This partnership comes at a time when Intel has scaled back its ambitious plans to build new factories, a decision that has left potential customers hesitant.
Once a leading force in the chip industry, Intel has lost some of its influence in recent years. However, the US government's investment in Intel, facilitated by billions in subsidies promised last year, aims to help the company regain its footing. The US government secured a stake of approximately 10% in Intel.
Nvidia, known primarily for its graphics cards, has seen explosive growth and is now the world's most valuable company with a current market capitalization of $4.3 trillion. The company's CEO, Jensen Huang, initiated the partnership with Intel. Despite initial reservations, Nvidia is providing Intel with multi-billion-dollar support, purchasing shares worth five billion dollars.
Nvidia's chip systems are the key technology for training and operating software with artificial intelligence. In this field, Intel has been lagging behind Nvidia. The collaboration between the two companies will see Intel building processors for X86 systems adapted to Nvidia's data center technology.
The investment price for Intel was $23.28. The announcement of the partnership sent Intel's stock price soaring by around 23 percent in US trading. After the announcement, Intel's stock price rose to $30.57 at the close of trading in New York.
Nvidia CEO Huang stated that the partnership with Intel shows that the computer world is fundamentally changing. However, US President Donald Trump demanded a return for the investment. The planned plant in Magdeburg was scrapped as part of Intel's scaled-back plans.
It's important to note that smartphones and most tablets run on technology from chip developer Arm, which is not involved in this partnership. The collaboration between Intel and Nvidia is a significant development in the world of AI and data centers, and it will be interesting to see how this partnership unfolds in the coming months.
In conclusion, the partnership between Intel and Nvidia is a strategic move aimed at boosting the US chip industry. With Nvidia providing financial support and Intel leveraging its manufacturing capabilities, this collaboration has the potential to reshape the tech landscape, particularly in the field of artificial intelligence.
