Intel Eyes $1.6 Billion AI Chip Buy As It Takes On Nvidia's Turf
Intel Corporation is reportedly on the verge of acquiring SambaNova Systems, an artificial intelligence chip startup, for an estimated $1.6 billion, inclusive of debt. This strategic move aims to bolster Intel's competitive edge in the rapidly expanding AI chip market, where it seeks to challenge the dominance of industry giant Nvidia. The potential acquisition aligns with Intel's broader AI strategy, which has contributed to significant stock gains throughout the year.
Detailed Report on Intel's Strategic Acquisition and Market Performance
As of December 12, 2025, sources indicate that Intel is engaged in advanced negotiations to purchase Palo Alto-based SambaNova Systems. This deal, valued at approximately $1.6 billion, could conclude as early as the upcoming month. While the acquisition appears to be Intel's preferred path, SambaNova is also exploring alternative investment opportunities, having reportedly received term sheets from other interested parties.
SambaNova Systems, established in 2017 by prominent Stanford professors, specializes in the development of bespoke AI chips designed to rival the offerings of Nvidia. Interestingly, Intel CEO Lip-Bu Tan chairs SambaNova, and his venture capital firm, Walden International, spearheaded SambaNova's $56 million Series A funding round in 2018.
Should the acquisition proceed at the reported valuation, Intel would secure a highly coveted AI platform at a considerable discount, especially when compared to SambaNova's peak valuation of $5 billion during a 2021 funding round led by SoftBank. Intel's robust financial position, with $11.14 billion in cash and cash equivalents as of September 27, 2025, provides ample backing for such a significant investment.
Intel's stock has experienced an impressive 89% increase year-to-date, fueled by its intensified focus on AI, substantial support from the U.S. government, and promising partnerships with major clients like Apple Inc. The company's third-quarter results, released on October 23, underscored its strong performance, with revenue reaching $13.65 billion, surpassing analyst estimates of $13.14 billion. Adjusted earnings per share were reported at 23 cents, significantly exceeding forecasts.
Overall, Intel's total revenue saw a 3% year-over-year increase, with Client Computing revenue rising by 5%, while Data Center and AI revenue experienced a slight 1% dip. The company generated $2.5 billion in operating cash flow. CEO Lip-Bu Tan emphasized that the surging demand for AI is creating substantial opportunities across Intel's diverse portfolio, including CPUs, accelerators, Application-Specific Integrated Circuits, and its foundry services. Looking ahead, Intel projects fourth-quarter revenue to range between $12.8 billion and $13.8 billion, with adjusted earnings anticipated to be eight cents per share. On the premarket trading day of Monday, Intel's shares were up by 1.03% at $38.20.
This strategic move by Intel highlights the intense competition and rapid evolution within the artificial intelligence hardware landscape. By potentially acquiring SambaNova, Intel demonstrates its commitment to innovation and its ambition to reclaim a leading position in the burgeoning AI chip market. This acquisition could significantly reshape the competitive dynamics, offering fresh avenues for technological advancements and market growth. For consumers and industries alike, this rivalry promises accelerated development and more powerful AI solutions in the future.