Tech Giant Nvidia Pours $5 Billion into Intel
In a significant shift in the tech industry, Nvidia is currently leading the field of artificial intelligence (AI), leaving Intel in its wake. This development comes as Intel has lost much of its significance in the chip industry.
In a bid to regain its footing, Intel has announced plans to build processors of its X86 system that are adapted to Nvidia's technology for data centers. This move is part of Intel's strategy to increasingly become a contract manufacturer for other chip companies.
The partnership between Intel and Nvidia is a sign of a fundamental change in the computer world, according to Nvidia CEO Jensen Huang. The deal, however, does not specify the financial terms beyond the initial $5 billion purchase of Intel shares by Nvidia.
The US government recently acquired a stake of around 10 percent in Intel, with the person representing President Donald Trump acquiring about a 10 percent stake in Intel's market capitalization and pledging funds for factory construction financing in the USA. However, no public information specifies a single individual's identity for this role.
Nvidia, with its explosive growth, is currently the world's most valuable company, with a market capitalization of $4.3 trillion. The company, originally famous for its graphics cards, is now the key technology for training and operating software with artificial intelligence.
Potential customers are hesitant so far regarding Intel's plans. Meanwhile, Intel's stock temporarily jumped by around 28 percent in US trading following the announcement of the partnership.
Smartphones and most tablets run on technology from chip developer Arm, leaving the market for data centers, a crucial area for AI, as the main battleground for Intel and Nvidia.
Ambitious plans to build new factories, including the planned plant in Magdeburg, have been scaled back. Intel will now focus on adapting its technology to Nvidia's AI-focused chip systems.
The billions in subsidies promised last year served as the purchase price for the US government's stake in Intel. The partnership between Intel and Nvidia marks a new era in the tech industry, with the two giants working together to drive innovation in AI.
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