It’s been a torrid 24 hours in AI-land as the US’ AI sector becomes even more intertwined, the Chinese step up the rivalry with NVIDIA which splashed the cash in the UK
NVIDIA announced it will acquire a $5 billion stake in Intel, paying $23.28 per share. It plans to jointly develop “multiple generations of custom datacentre and PC products that accelerate applications and workloads across hyperscale, enterprise and consumer markets,” according to a press statement.
Apparently Intel is to build NVIDIA-custom x86 CPUs for NVIDIA to integrate into its AI-infrastructure platforms. NVIDIA’s founder and CEO, Jensen Huang, fresh from accompanying the US’ President’s state visit to the UK, said, “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.
“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. Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
Intel’s recent investors
NVIDIA is just the latest investor in Intel. In August, Japan’s SoftBank Group announced it would invest $2 billion in the ailing chip company and the US government sank $8.9 billion in the struggling chip maker in the same month. Bloomberg reported that the US government’s stake is now worth $13 billion after the NVIDIA announcement caused Intel’s shares to soar by almost 25% at one point, “their biggest rally in almost four decades”.
The Economist called NVIDIA’s investment in its rival “a shrewd political move,” but fretted about how incestuous the AI sector is. Some are hailing NVIDIA as Intel’s saviour and certainly it is reminiscent of when Microsoft invested $150 million in Apple to keep its rival afloat back in August 1997.
Not so hot in China
Meanwhile the complex trading relations between China and the US with its exemptions, extensions and brinkmanship have taken a turn for the worse from NVIDIA’s point of view. In the latest turn of events, China’s Cyberspace Administration instructed the countries’ tech companies – including Alibaba and ByteDance – to cease using NVIDIA’s AI chips.
The ban is effective instantly meaning Chinese firms must not buy or test Nvidia’s RTX Pro 6000D chips despite having active orders in place.
Huang told a press conference in the UK before he jetted home that he was disappointed by the decision and NVIDIA’s shared fell almost 3%. Whether the ban is simply a negotiating position remains to be seen. If it is not, NVIDIA could lose up to 15% of its overall revenues according to some sources.
And there is cause to think maybe it is not as on the same day as the ban, Huawei announced new computing systems for powering AI with its in-house Ascend chips and said it plans to launch its new “Atlas 950 SuperCluster” as soon as next year. It launched its Ascend 910C in the first quarter of 2025 in response to US export bans.Check out its published roadmap here.
“The competition has undeniably arrived and is gaining momentum,” an NVIDIA spokesperson told CNBC in a statement. “Customers will choose the best technology stack for running the world’s most popular commercial applications and open-source models.”
In August, a Financial Times report [subscription needed] said, “China’s chipmakers are seeking to triple the country’s total output of artificial intelligence processors next year, as Beijing races the US to develop the most advanced AI”.
Earlier this year, NVIDIA’s value fell $600 billion in January when the Chinese demonstrated DeepSeek, which appeared to rival US AI models’ performance using fewer and less sophisticated chips, not to mention power, at a fraction of the price.
Should NVIDIA care?
Even so, not everyone is convinced that China can outgun the US on AI: Richard Windsor, owner of Free Radio Mobile, thinks not in this blog, Huawei vs. Nvidia – No Contest, published today.
