On Sept. 18, tech giants Intel Corp. and Nvidia Corp. announced plans to develop custom CPUs for data centers that integrate into Nvidia’s artificial intelligence (AI) ecosystem while advancing innovation in personal computing. The collaboration comes amid growing demand for semiconductor chips specifically designed to handle AI workloads, which require significantly more power than traditional computing tasks.
“AI is powering a new industrial revolution and reinventing every layer of the computing stack—from silicon to systems to software. At the heart of this reinvention is Nvidia’s CUDA architecture,” Nvidia founder and CEO Jensen Huang said in a statement. “This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem—a fusion of two world-class platforms.”
As part of the deal, Nvidia invested $5 billion in Intel’s common stock at a purchase price of $23.28 per share. According to Reuters, the stake will make Nvidia one of Intel’s largest shareholders, giving it roughly 4% of the company after new shares are issued.
“Intel’s leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement Nvidia’s AI and accelerated computing leadership to enable new breakthroughs for the industry,” Intel CEO Lip-Bu Tan said in a statement.
Details about product timelines and market availability remain limited. Both Intel and Nvidia currently work with Taiwan Semiconductor Manufacturing Co. (TSMC). Intel manufactures much of its products in-house but uses TSMC for some of its production. Nvidia uses TSMC exclusively for its contract manufacturing services, which will continue to be the case, according to Huang. “Nvidia and Intel are both successful customers of TSMC,” Huang said during a press conference. “But today, our partnership is 100% focused on the custom CPUs we are building for data centers that can connect to the NVIDIA AI ecosystem.”
Advancements in AI impact manufacturing processes and the supply chain. According to Gartner Inc., supply chain organizations are looking to AI-based forecasting as a tool for predicting future demand, and 70% of large-scale organizations expect to use the technology by 2030.
Nvidia’s investment in Intel follows a $2 billion infusion from Japan’s SoftBank Group in the struggling chipmaker, and last month Intel agreed to give the U.S government a 10% stake in the company. Both Intel’s and Nvidia’s stock prices soared following the latest announcement.
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