Nvidia Purchases Massive Amounts of Hardware From Intel.
In a groundbreaking move, Nvidia and Intel have announced a collaboration to develop chips for PCs and data centers. This partnership comes after Nvidia's investment of $5 billion in Intel, making the tech giant one of Intel's largest shareholders.
The news has sent shockwaves through the tech industry, with Intel's US-listed shares surging by an unprecedented 30% in pre-market trading. Conversely, AMD's stock fell nearly four percent, while TSMC's US-listed shares dropped by 1.6%, indicating potential disadvantages for AMD and TSMC in the wake of this collaboration.
Nvidia's technology, crucial for AI operations, is expected to enable the jointly developed chips to communicate faster than before. Nvidia CEO Jensen Huang stated, "Together, we will expand our ecosystems and lay the foundation for the next era of computing."
The backing from Nvidia is a significant victory for Intel after years of unsuccessful turnaround efforts. However, the agreement may pose a potential threat to Taiwanese contract manufacturer TSMC, which currently produces Nvidia's flagship processors.
It's worth noting that Intel did not initially secure a significant contract to manufacture Nvidia processors. The price Nvidia is paying, $23.28 per Intel share, is more than the price the US government paid for a special 10% stake in Intel last month.
The first joint products between Nvidia and Intel are yet to be disclosed for market release. The partnership's impact on the tech industry and the competitive landscape remains to be seen. However, one thing is clear: the tech world is on the brink of a new era, with Nvidia and Intel leading the charge.
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