Nvidia allocates a hefty five billion dollars towards Intel's ventures.
In a move that signifies a significant change in the computing world, Intel and Nvidia have announced a partnership that will see Intel increasingly becoming a contract manufacturer for other chip companies.
The partnership, which is a testament to the fundamental changes in the industry, comes at a crucial time for Intel, given its current challenges. The company has lost much of its significance in the chip industry in recent years, and this collaboration is seen as a step towards regaining its lost ground.
Nvidia, the world's most valuable company with a current market capitalization of $4.3 trillion, was mainly known for its graphics cards prior to this. However, in the field of Artificial Intelligence, no one can compete with Nvidia. Its chip systems are key technology for training and operating software with AI.
Under the terms of the agreement, Intel will build processors from its X86 system adapted to Nvidia's data center technology. This collaboration indicates a fundamental shift in the computing industry, as it brings together two of the tech giants in a joint effort to develop chips.
The US government recently secured a stake of around 10 percent in Intel. The billions in subsidies promised last year served as the purchase price for the stake. In a surprising turn of events, Nvidia will purchase Intel shares worth $5 billion.
However, potential customers are hesitant about Intel's ambitious plans to build new factories. The planned plant in Magdeburg was scrapped, which has raised concerns about Intel's ability to deliver on its promises.
The CEO of Nvidia, Jensen Huang, described the collaboration with Intel as a testament to the profound changes in the field of computer technology. His statement underscores the importance of this partnership in the tech industry.
Interestingly, the news of the partnership led to a temporary surge in Intel's stock price. In US trading, Intel's stock price surged by around 28 percent, indicating a positive response from the market.
This partnership between Intel and Nvidia is a significant development in the tech industry, marking a new era of collaboration and innovation. It remains to be seen how this partnership will shape the future of the tech industry and whether it will help Intel regain its lost position in the chip industry.
