Intel Approaches Apple for Investment in Chipmaking
Intel has reportedly reached out to Apple about potentially investing in struggling chip manufacturers, as part of an initiative to bolster its business, which is currently partially owned by the US government.
According to sources familiar with the situation who preferred to remain anonymous, Intel is looking to secure funding from Apple to aid its ongoing transformation efforts. The discussions also explore ways the two companies might collaborate more closely, although the specifics remain unclear.
These negotiations are still in the early stages, and it’s uncertain if they will yield a definitive agreement. However, news of the talks has already yielded a noticeable effect on Intel’s stock, which increased by 6.4% to $31.22 following the initial reports.
This potential collaboration with Apple follows a number of recent investments in Intel from key figures in the tech sector. Just last week, Nvidia Corp. announced plans to invest $5 billion in chipmakers while collaborating on personal computer and data center chips. Meanwhile, SoftBank Group Corp. recently revealed its $2 billion investment in Intel as part of its strategy to enhance its presence in the US market.
In previous reports, it was highlighted that Nvidia and Intel’s arrangement goes beyond simple capital exchanges. They have agreed to jointly develop innovative products for data centers and personal computing to leverage their respective strengths. Intel will manufacture a custom X86 CPU for Nvidia, which will be integrated into its AI infrastructure. Additionally, Intel is set to create a chip system for Nvidia Chiplets, a modular component designed to power next-generation PCs. This partnership aims to expand the ecosystems of both companies, laying the groundwork for, as Nvidia CEO Jensen Huang puts it, the “age of The Next Computing.”
Despite receiving federal backing and securing these investments, Intel is still grappling with significant challenges in its quest to reclaim its former status as a leader in the semiconductor industry. The company has lost substantial technical advantages and market share to rivals like AMD. Furthermore, Intel is struggling to keep pace with the surging demand for AI hardware, a sector where Nvidia currently leads.
Under the direction of CEO Lip-Bu Tan, Intel is attempting to shift its strategy to regain its foothold in the chip market. The company aims to operate as a chip foundry, producing semiconductors for outside clients. However, attracting enough customers to justify expansion plans has proven to be quite challenging.
This shift began during the Trump administration when the government took an interest in Intel in exchange for funding outlined in the Chips Act. Reports indicated that the government is looking for investment opportunities in semiconductors and rare earth materials, including stocks in companies like Nvidia.
It was mentioned that, “We should gain stock interests for money,” according to Commerce Bureau Chief Howard Lutnick. He indicated that the funds being delivered were already committed under the Biden administration, suggesting a reciprocal expectation for these investments.
