Joint Development of Next-Generation Chips
Potential Threat to TSMC, Inevitable Impact on AMD
Nvidia, which dominates the global artificial intelligence (AI) chip market, has decided to invest $5 billion (approximately 6.95 trillion won) in Intel to jointly develop semiconductors for PCs and data centers. Nvidia, which already holds a monopolistic position in the AI chip market, is seen as aiming to complement its central processing unit (CPU) capabilities through collaboration with Intel, while also seeking to strengthen the U.S. semiconductor alliance and reduce reliance on China and Taiwan.
According to Reuters and other sources on September 18 (local time), Nvidia announced that it would invest $5 billion in Intel by purchasing Intel common shares at $23.28 per share. With this investment, Nvidia will acquire a 4% stake in Intel. Nvidia thus becomes the second company to inject billions of dollars into Intel. Previously, in August, Japan's leading technology investment firm SoftBank invested $2 billion in Intel, securing a 2% stake. Earlier, on August 23, U.S. President Donald Trump acquired a 10% stake in Intel, becoming its largest shareholder.
Jensen Huang, CEO of Nvidia, stated, "This historic partnership closely connects AI and accelerated computing technologies with Intel's CPUs and the existing x86 ecosystem. Together, we will expand the ecosystem and lay the foundation for next-generation computing."
Pat Gelsinger, CEO of Intel, said, "I appreciate the trust Jensen Huang and the Nvidia team have shown in Intel, and I look forward to working together to drive innovation for our customers. Intel's x86 architecture has been the foundation of modern computing for decades, and we will continue to innovate to support future workloads."
The two companies also announced plans to collaborate on the joint development of chips for PCs and data centers. Intel revealed that it will use Nvidia's network technology, NVLink, to create custom CPUs for Nvidia GPU-based AI infrastructure. Nvidia will also design chip systems for PCs. However, Reuters reported that the agreement does not include Intel's foundry (semiconductor contract manufacturing) division producing Nvidia chips.
The Guardian reported, "This agreement effectively serves as a lifeline for Intel," adding that "it is seen as giving Intel a chance to re-enter the AI competition, even if belatedly."
This investment decision is expected to impact Intel's competitors as well. In particular, as the possibility of Nvidia utilizing Intel's foundry facilities is raised, some analysts see this as a potential threat to Taiwan's TSMC, which is Nvidia's key manufacturing partner.
There are also predictions that AMD, which has competed with Intel in the PC processor market, will suffer a blow to its competitiveness. This is because Intel, by partnering with Nvidia, is now more likely to gain an advantage in the competition to supply chips for data centers.
Following Nvidia's announcement of its $5 billion investment in Intel, Intel's stock price soared by 22.77%, while Nvidia also jumped by 3.49%.
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