In Silicon Valley, there are alliances that seem natural, and those that shake the foundations of the entire industry. The collaboration between Nvidia and Intel announced yesterday undoubtedly falls into the latter category.
This is no mere business deal; it is a strategic pact made by two former fierce rivals. We are witnessing a historic moment in which the leader of the AI revolution (Nvidia) shakes hands with the giant that almost slept through this revolution (Intel).
The question we must ask ourselves goes far beyond corporate press releases: are we witnessing the birth of a synergy that will drive innovation, or rather the creation of a powerful duopoly that will concretise the market for years and marginalise competition?
Act of desperation or masterful chessboard?
To understand the importance of this alliance, it is necessary to look at the position from which both players are starting. Intel, once the undisputed king of silicon, has been struggling for years. Problems with the transition to lower technology processes, delays and increasing competition have caused the company to lose its leadership position to Nvidia and Samsung.
At a time of rapid growth in GPU-driven artificial intelligence, Intel’s dominance in the CPU segment has proved insufficient. From this perspective, the pact with Nvidia looks like a desperate attempt to get back into the highest stakes game.
This is an acknowledgement that without AI leadership technology, Intel is unable to compete on the all-important innovation front alone.
For Nvidia, on the other hand, this move is pure, calculating strategy. Jensen Huang’s company absolutely dominates the data centre and AI accelerator segments. But its next goal is to conquer a market where Intel still has hegemony: personal computers.
By natively integrating its graphics chips (in the form of RTX chiplets) with Intel processors, Nvidia gains access to the vast x86 ecosystem. It’s a brilliant move that allows it to enter the AI PC segment ‘through doors and windows’, bypassing the need to build everything from scratch.
Nvidia is not just buying Intel’s shares for $5bn; it is buying the decades of experience, customer base and distribution channels of its former rival.
What does AMD say about this?
Every great alliance creates not only winners but also losers. In this case, the company with the most to lose is obvious: AMD. Under Lisa Su’s leadership, AMD has done the near impossible, becoming a viable alternative to both Intel in the processor market (Ryzen series) and Nvidia in the graphics card market (Radeon series).
The company deftly manoeuvred between the two giants, taking market share away from them.
Now, however, AMD is facing a nightmare scenario – a battle against a combined front end. Imagine laptops and workstations where Intel’s processor and Nvidia’s graphics chip are integrated at silicon level.
This synergy can offer performance and power efficiency that standalone AMD products will find extremely difficult to compete with. It’s no longer a battle on two separate fronts; it’s a clash with an emerging technological behemoth that controls key elements of the PC platform.
From competition to a new order
In the IT industry, there is talk of the phenomenon of ‘coopetition’ – cooperation between competitors in specific areas. However, the Nvidia and Intel deal appears to be something much deeper. This is not a temporary project, but the foundation for a new market order.
The aim is to create a hardware platform that is so integrated and optimised that it becomes the de facto standard for anyone serious about artificial intelligence on PCs and servers.
The long-term consequences could be devastating for market diversity. If the Nvidia-Intel duo dominates the AI PC segment, software manufacturers will begin to optimise their applications specifically for this architecture, further marginalising alternatives.
We will be in a situation where real choice will be limited and innovations outside this ecosystem may find it extremely difficult to break through to a mass audience.
A golden cage for the consumer?
Undoubtedly, in the short term, this collaboration will produce exciting products. Computers will become more powerful and AI-based functions more accessible. But in the long term, we risk entering a ‘golden cage’ – an ecosystem so perfect and integrated that we will not want or be able to leave it.
History teaches us that when competition weakens, innovation suffers and prices rise.
Nvidia’s surprising move is not only great strategically. It shows that growth and development is being undertaken in IT at all costs, and that the drive to grab as much of the market as possible is a key priority. The move will save Intel from the worst, the question is: at what cost?
The VMware and Broadcom merger has shown that the introduction of new orders can sometimes be painful for markets. And the growing central IT powers, apart from show trials, are not only not constrained in any effective way by state bodies. On the contrary, today, governments consider technological monopolists as an element of geopolitical advantage, which, in the age of the digital rush, is logical, albeit short-sighted and potentially damaging in the long term.
