Tech heavyweights lend a hand: Nvidia pours billions into Intel's research and development
In a significant development for the tech world, the U.S. government has acquired a nearly 10% stake in Intel, the once dominant player in the chip industry. This move, which was announced recently, marks a turning point for Intel as it grapples with a crisis in recent years, with smartphones and most tablets running on ARM technology leaving it behind.
The acquisition was made using billions in subsidies promised last year. The purchase price for Intel was $23.28, which is higher than the closing stock price after the announcement. The U.S. government acquired 433.3 million shares for $8.9 billion, securing its stake in the company.
However, potential customers have been hesitant to commit to Intel's contract manufacturing capabilities, a move that Intel had been pursuing to become a more prominent contract manufacturer for other chip companies. Intel's plans to build new factories, including the proposed plant in Magdeburg, have been scaled back.
The U.S. government's decision not to give the money free of charge, but to acquire a stake in Intel, is a departure from the original plan. This move is seen as a strategic investment to bolster the U.S.'s position in the global chip industry.
Meanwhile, Nvidia, the key technology for training and operating software with artificial intelligence, is leading the way in the chip industry. Nvidia CEO Jensen Huang offered no guarantees about using Intel's contract manufacturing capabilities, but he did see the partnership between Intel and Nvidia as a sign of fundamental changes happening in the tech world.
Interestingly, Nvidia is currently the world's most valuable company, with a market capitalization of $4.3 trillion, surpassing Intel's value. The acquisition of Intel by the U.S. government does not extend to Nvidia, which remains an independent entity.
After the announcement, Intel's stock closed at $30.57 in New York. The implications of this acquisition for the tech industry and for Intel's future remain to be seen. However, one thing is clear: the U.S. government's investment in Intel is a significant step in the ongoing competition in the global chip industry.
Read also:
- Reconsidering the Approach to Mountain Height Measurement?
- Tesla is reportedly staying away from the solid-state battery trend, as suggested by indications from CATL and Panasonic.
- Tesla's 37th week update: Stock remains steady, potential successor for Musk, unveiling of new megapack, fuel reveal delayed until IAA event
- Lieutenant Governor Kounalakis joins SoCalGas in unveiling the novel H2 Hydrogen Innovation Experience, a one-of-a-kind demonstration.
