NVIDIA invests $ 5 billion US in betting and chip partnership with Intel
NVIDIA said on Thursday that it would invest $ 5 billion in Intel, which would throw a few weeks after the struggling American chipmaker a few weeks after the White House has made an extraordinary deal for the US government to take a huge stake in the company.
This stake will immediately make Nvidia one of Intel’s largest shareholders, which will provide about four percent or more companies after the new shares are issued to complete the deal.
Nvidia’s support represents a new opening for Intel, which failed to pay after a turnaround attempt to the famous American manufacturer, and it jumped 30 percent of Intel’s shares in pre-market action.
The company-once of the flag industry of the chip industry claimed to insert “silicon” in Silicon Valley-appointed a new CEO, lip-bo tan in March.
He caught fire from American elected officials including US President Donald Trump, who called him to resign due to concerns about his relations with China.
This led to a fast systematic meeting in Washington which ended with the unusual arrangement of Intel. US government is a 10 percent stake in the company,
NVIDIA, who should have chips, is giving power to a global artificial intelligence boom, in a statement that it will pay $ 23.28 per share for Intel Common Stock, which is a price from $ 24.90 below $ 24.90, on which Intel’s shares were closed on Wednesday.
However, it is more than a price of $ 20.47 per share that the United States government paid for the stake in Intel last month.
Chris Beuchamp, the main market analyst of the IG Group in London, said, “This is a reflection of Nvidia that is to provide a variety of its investment within the US to an extent as well as to score some brownie points with the US government.”
“This does not change a major problem that NVidia is facing with China, but it puts it in favor of the US government.”
What is the plan detail?
The treaty consists of a plan to develop PC and data centers chips jointly for Intel and Nvidia, but significantly will not include Intel’s contract manufacturing business – where Intel is hired by other companies to manufacture its products or components, and is known as “foundry” in the chip industry – Chips are creating chips for NVIDIA.
Most analysts believe that in order to survive Intel’s foundry, it will eventually need to win a large customer like Nvidia, Apple, Qualcomm or Broadcom.
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Under the deal, the Intel Custom Data Center is planning to design the Central processor that NVidia will package with its AI chips, known as the GPU. A special Nvidia technology will allow Intel and Nvidia chips to communicate at a higher speed than before.
These rapid links are important in the AI ​​market, as many chips should work together to work together to chew through large -scale data.
Right now, NVIDIA’s best -selling AI servers are available only using their own chips with quick links, but the deal will now put Intel on the same footing, allowing it a chance to make money from each Nvidia server.
While Intel’s X86 Computing Architecture has lost land in both data centers and PCs for chips with technology from ARM Limited, it still has majority market share.
Nvidia CEO Jensen Huang said in a statement, “This historical cooperation tightly is a fusion of computing stack-two world-class platforms with AI and huge X86 ecosystems of Navidia and the huge X86 ecosystems of Intel.
The treaty also represents a possible risk for TSMC of Taiwan. The TSMC currently manufactures NVIDIA’s flagship processor, a business that the world’s most valuable company can expand to Intel a day.
Combined Nvidia-Intel chips can also provide a major competitive challenge to AMDs, developing their own AI servers, and broadcom, which also has chip-to-chip connection technology and helps companies such as Google develop AI chips.
Peter Anderson, the founder of Anderson Capital Management at Boston, said, “Whatever Nvidia decides to support the association will look attractive in Intel’s stock, because it means that NVDia looks at Intel.”
How will companies be financially affected?
Both companies did not disclose the financial terms of their technical cooperation, but said they would create “many generations” of future products.
“For Nvidia, the financial impact is small, but the political upside down is large: this step aligns with the US policy and can help China reduce sanctions on selling advanced chips,” said Matt Britadman, senior equity analyst of Hargravs Lansdown.
The deal also adds to the growing reserve of capital that Intel has submitted for weeks after the announcement of an investment of $ 2 billion from SoftBank and received $ 5.7 billion from the US government.
NVIDIA has struggled to sell its H20 chips in China, at the same time the company has tried to navigate demands from Washington and Beijing. In mid -August, Trump signed a deal, which gave the NVDia license to sell H20 chips to China in exchange for a 15 percent reduction of sales, but Nvidia has said that it has not sent any H20 chips to China.
According to reporting tomorrow by Financial Times, China has Since restricted Its companies try to increase their own chip industry by purchasing or testing Nvidia’s artificial intelligence chips.
