NVIDIA and Intel Look Strangely Similar? ... Because of This Country [Tech Talk]

Israel with Nvidia and Intel Core Research Labs
AI and High-Performance CPUs Made in Silicon Wadi

The common link between two leading American semiconductor companies is Israel. It is no exaggeration to say that Nvidia's dominance in the artificial intelligence (AI) semiconductor market began with its acquisition of the Israeli startup 'Mellanox.' Meanwhile, Intel's core chip design division is also located in Israel.

Nvidia's Differentiator: High-Speed Networks Made in Israel

Nvidia acquired Mellanox on March 11, 2019. The acquisition price was $7 billion (approximately 9.3 trillion KRW). It was one of the biggest deals in the tech industry, and it took a full year to transfer all Mellanox employees and assets under Nvidia's umbrella.

Mellanox is a networking technology startup founded in Israel in 1999. At the time of acquisition, it had about 2,000 employees. The company supports a communication connection method known as 'InfiniBand.' Today, InfiniBand can be easily found in enterprise data centers. It is a complex cable system connecting computing devices within a massive frame, essential for linking thousands of chips at once to build ultra-large systems.

Jensen Huang, CEO of NVIDIA, meeting with employees of Mellanox Israel [Image source=NVIDIA]

Even in 2019, InfiniBand was considered a critical element for cloud and high-performance computing (HPC). However, what Nvidia saw in Mellanox was the potential of AI. Nvidia anticipated that machine learning, including neural networks, would be dominated by ultra-large AI systems, and by acquiring Mellanox, it developed its own low-latency high-speed networking technologies called 'NVSwitch' and 'NVLink.'

These two technologies have become the fortress maintaining Nvidia's monopoly to this day. This is why Jensen Huang, Nvidia's CEO, holds Mellanox employees in special regard.

The 'Haifa Center' That Wrote the Legend of Intel CPUs

Intel is one of the few remaining Integrated Device Manufacturers (IDMs) on Earth. An IDM is a company that handles all semiconductor processes from design to actual production. Therefore, Intel's semiconductor design divisions are as important as its foundry operations. In particular, the design center in Haifa, Israel, is considered the 'crown jewel' among all Intel offices.

Intel High-Five Design Center. [Image source=Intel]

The Haifa Center is Intel's R&D headquarters involved in hardware and software development. Many brands that once propelled Intel's central processing units (CPUs) to the world's number one position?such as Core M, Sandy Bridge, and Skylake?were born from the Haifa team. The latest CPU, 'Lunar Lake,' was reportedly led in development by Haifa. Additionally, Intel's autonomous driving technology subsidiary 'Mobileye' and AI accelerator developer 'Habana Labs' are also headquartered in Israel.

Tech Industry as Israel's Security Anchor Beyond Economy

The fact that Israel maintains deep cooperative relationships with semiconductor companies central to U.S. economic security also serves as a 'strategic weapon' for Israel. After being invaded by the Palestinian militant group 'Hamas' in October last year and conducting large-scale military operations in the Gaza Strip, Israel has caused numerous casualties and faced criticism from parts of the international community, but it continues to enjoy strong support from the United States.

Israeli media attribute this close alliance to investments from tech companies like Nvidia and Intel. The Hebrew outlet 'Israel Hayom' recently mentioned Mellanox in an article, stating, "Israel and Nvidia have an inseparable relationship," emphasizing, "We will always stand together in good times and bad." This reflects confidence that Israel's assistance is essential for American companies to maintain leadership in various hegemonic competitions, including technology.

Israel IT Built by Soldiers

Israel's tech hub Haifa
[Image source=Pixabay]

The strength of Israel's tech industry comes from the IT business cluster near the capital Tel Aviv called 'Silicon Wadi.' 'Wadi' means 'dry valley' in Hebrew and is a metaphor for the land on which Tel Aviv was built. Silicon Wadi, home to about 6,500 tech companies, boasts a status comparable to Silicon Valley.

In fact, tracing the roots of Israel's tech industry and startup culture leads back to American companies. In the 1990s, Motorola, then the world's leading wireless communication company, established an R&D center in Israel, marking the beginning of serious tech cooperation between the U.S. and Israel. Subsequently, foreign direct investment (FDI) from American global corporations poured in, and Silicon Wadi flourished.

A unique aspect is that one of the key contributors to Silicon Wadi's growth was none other than the military. Due to its borders with hostile armed groups like Hamas and Hezbollah, Israel is a conscription country. Since the 1960s, the Israel Defense Forces have trained a specialized IT corps called 'Mamram' to enhance information warfare capabilities. Veterans of Mamram have provided valuable human resources to the nascent IT companies, helping to build today's Silicon Wadi. Mamram remains one of the core personnel groups responsible for Israel's civilian and military sectors.