There could be anti-trust concerns, but given that scale is critical and NVIDIA is estimated to account for 80% of the AI chip market…
The Financial Times [subscription needed] reported over the weekend that Qualcomm has approach its struggling competitor, Intel, about the possibility of a ‘friendly’ takeover.
Unnamed sources cited in the story on the Intel side have apparently expressed concerns that any such proposed deal would be blocked by to anti-trust regulations.
However, given that scale is increasingly becoming essential in the chip business and that NVIDIA is estimated to account for 80% of the AI chip market right now might sway regulators’ thinking. Intel’s share price has halved this calendar year – it has been slow to adopt new manufacturing technologies and has missed out on the booming data centre and AI markets.
And it’s decline appears to be accelerating. Intel lost $30 billion off its market cap after its earnings report in August. The dividend was scrapped and 15,000 people are to lose their jobs.
Apparently Intel is working with Goldman Sachs and Morgan Stanley to evalutate Qualcomm’s proposal, according to the FT. The latter has been helping it fend off activist investors for some months, according to CNBC.
Nobody is commenting publicly for the moment.
Last week Intel announced it is to split its foundry business into a separate business unit with its own governance structure within the group. The foundry business is the area seen with the most potential for growth.