NVIDIA Sends Rival Intel a $5 Billion Lifeline

By Luke Womack

NVIDIA and Intel are two tech companies on opposite sides of the stock market, yet NVIDIA is taking a risk by buying $5 billion worth of Intel stock. The move is planned to be beneficial for both companies, with NVIDIA helping Intel develop AI infrastructure and improve other personal computing technologies. 

Intel had been at the forefront of American technology, but recently has fallen far behind its competitors and has lost its original reputation as the best technology available for personal and commercial computers. Newer companies, such as AMD and NVIDIA, have eroded parts of Intel’s market dominance, while the company and its business strategies have been put into question.

Even the federal government has been concerned about Intel and the risk of it heading down a similar path to IBM. IBM became the world’s largest computer manufacturer in the 60s and 70s, yet they decided to disregard the personal computer market, eventually leading to its current lack of total computer market share. AMD and TSMC have both committed themselves to supporting Intel and its technological development. 

When Intel and NVIDIA announced their new joint venture, it was initially seen as another lifeline thrown to the company by the United States government to prevent the expansion and creation of AI and other technologies in China. NVIDIA and Intel, however, made it clear that the venture is strictly non-politically motivated. 

This change comes after Intel began releasing competitive graphics cards, which have hurt NVIDIA’s sales in the low-end market. Reputable online sleuths and information leakers have hinted at the possibility of Intel stopping its graphics card lineup. Many fear that the move could be the first of many by NVIDIA to monopolize the graphics card market, which is currently made up of Intel, NVIDIA, and AMD as the main competitors. 

Others are also concerned about the lack of action from the Federal Trade Commission under the current Trump Administration. Moves like the recent buyout of Electronic Arts and Activision Blizzard have brought fear to the video game and technology industries. Many view these conglomerates as the precursor to the formation of monopolies. If NVIDIA can influence Intel, other companies like AMD and TSMC could be feeding technological advances straight to their main competitor, giving NVIDIA a massive advantage. 

NVIDIA is the world's largest graphics card company, meaning that AI is heavily dependent on the products they release. AI runs on graphics cards due to their intensive loads and the heat they generate. The more cost and energy-efficient a card is, the better it is for AI. The new Intel Arc graphics cards proved to be more cost-effective than a lower-end NVIDIA card, leaving NVIDIA without control of a key market. 

NVIDIA also announced that it would invest $100 billion into OpenAI in a move to help AI development. AI has been the catalyst for the growth of NVIDIA’s rise to the top of the stock exchange, tripling its stock price in under a year.