Nvidiaallocates five billion dollars towards a significant investment in Intel.
In a significant move for the tech industry, Intel and Nvidia have announced a collaboration to develop chips for data centers. This partnership will see Intel building processors of its X86 system, adapted to Nvidia's technology, marking a potential game-changer in the industry.
The collaboration is led by Nvidia CEO Jensen Huang, who has stated that this partnership is a sign of a fundamental change in the computer world. Nvidia, previously known mainly for its graphics cards, has seen explosive growth and is now the world's most valuable company with a current market capitalization of $4.3 trillion.
The partnership comes at a time when Intel is facing struggles and has had to scale back ambitious plans to build new factories, including the planned plant in Magdeburg. Intel's significance in the chip industry has decreased in recent years, while Nvidia, with its key technology for training and operating software with artificial intelligence, has taken the lead in the AI sector, leaving no other company in its wake.
The US government, which recently acquired a stake of around ten percent in Intel, has also played a role in the collaboration. Originally, Intel was supposed to receive the subsidies free of charge as support for building new factories in the US. However, the US government bought its stake in Intel with the billions in subsidies promised last year. In a surprising turn of events, US President Donald Trump demanded a stake in Intel in return for the subsidies.
Potential customers are hesitant about doing business with Intel so far, and the company is now planning to become a more prominent contract manufacturer for other chip companies. In a boost to its fortunes, Intel's stock soared in US trading, temporarily jumping by around 28 percent, following the announcement of the support and collaboration with Nvidia. Nvidia, in turn, is investing five billion dollars in Intel, providing the company with multi-billion dollar support.
The integration of Nvidia's technology for data centers into Intel's processors is expected to further strengthen Intel's position in the market. Smartphones and most tablets run on technology from chip developer Arm, but the collaboration between Intel and Nvidia may signal a shift in the industry, with data center technology becoming increasingly important.
Nvidia CEO Jensen Huang has emphasized that the partnership with Intel is a sign of the changing times in the computer industry. As the industry evolves, it will be interesting to see how this collaboration shapes the future of technology.
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