Nvidia earned a staggering $150 billion following Intel's announcement, surpassing Intel's market capitalization – managing a 30-fold return on its $5 billion investment within a single day.
In a significant move for the technology industry, Nvidia and Intel have announced a groundbreaking partnership. The collaboration, which has been in discussions for about a year, is expected to reshape the landscape of AI and consumer computing.
The partnership, valued at $5 billion, sees Nvidia investing in Intel. This investment, according to Nvidia's CEO, Jensen Huang, has the potential to address a vast majority of the consumer PC market, including the notebook market of 150 million units sold annually.
The focus of this partnership is on custom x86 CPUs for AI platforms and consumer processors. It extends to data center CPUs customized for Nvidia's AI workloads and client processors pairing Intel's x86 design with Nvidia RTX GPUs. Three architecture teams are working on the partnership, covering CPU architecture, server, and PC product lines.
The partnership is already being hailed as a huge win for Intel, which has faced challenges in recent years. For Nvidia, it represents a strategic alliance that could substantially impact its market position in the semiconductor industry. The investment by Nvidia has resulted in the company acquiring about a 4% stake in Intel, reflecting a significant capital injection.
Following the partnership announcement, Nvidia's market value surged by approximately $150 billion, reaching about $4.28 trillion. This surge was around 30 times the size of its $5 billion investment in Intel.
The partnership has been met with enthusiasm by the US government, with Secretary Lutnick of Commerce expressing his excitement and support for the alliance between the two American technology companies.
According to reports by Tom's Hardware, the partnership will see Intel building custom x86 CPUs for Nvidia's data center platforms and producing chips that combine Intel processors with Nvidia RTX GPU chiplets for PCs. However, the specifics of how Intel is bringing AI advantage and unrivaled security to every industry are yet to be detailed.
It's important to note that there has been no mention of any investment by Intel's former CEO in a hardware startup aiming to make Nvidia obsolete. Moreover, Huang dismissed any influence of politics in the partnership, stating that the Trump administration was supportive but had no involvement in the partnership.
This strategic alliance between Nvidia and Intel is being seen as a turning point in how both companies approach AI and consumer computing. As the partnership progresses, it is expected to bring about significant advancements in these areas, further cementing the positions of these tech giants in the industry.
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