Now this is a completely unfounded rumor, but a fun one to think about: Robert Cringely has posted a thought on his “I, Cringely” blog that Intel might simply buy NVidia:
Intel this week cancelled Larrabee, its proposed graphics processing unit (GPU) that was intended to compete with both nVIDIA and ATi (now a part of AMD). The moment AMD bought ATi Intel had to decide whether to build or buy its own GPU to stay in contention. They decided to build, or at least said they had. It’s hard to say how viable Larrabee ever was but at some point it turned from a weapon against nVIDIA to a barrier to Intel buying nVIDIA. So Larrabee had to go, because without that chip Intel presents a much less imposing target for the Department of Justice and Federal Trade Commission which might oppose a merger on anti-trust grounds.
It is an interesting thought.. Buying NVidia would settle several of Intel’s problems:
- Instant power in the HPC space, with the acquisition of the only currently viable HPC GPGPU solution (Tesla)
- Settle the Atom/Ion lawsuits and investigations
- Make them feature-equal with the AMD/ATI combination
- Cover up the Larrabee debacle
It’s an interesting thought, but I’m not sure Intel has the cash reserves to make such an acquisition. NVidia currently has a market cap of $8.63Billion, as opposed to Intel’s $109.45Billion, so I suppose Intel could leverage some assets to make it a reality. What do you think?
via I, Cringely » Blog Archive » Intel Will Buy nVIDIA – Cringely on technology.
nVidia are a threat to Intel as we are not so far away from GPU’s being utilised like CPU’s and GPU’s are far more powerful… Also, on a side note, distributed GPU rendering will be mainstrain soon as well… Therefore, Blade Servers will become redundant…
@Nick I can’t see it being any more viable (monopoly-wise) than an Intel-Nvidia merger.. AMD-Nvidia would consolidate ATI & NVidia, making pretty much a single provider of high-end 3d graphics cards.
Intel buying NVIDIA would never be allowed for anti-mononopoly reasons by whoever is in charge (?the FTC) of competition in the US.
However, it would be cool for AMD and NVIDIA to merge and it would probably be allowed. This would produce a corporation with sufficient muscle to stand up to Intel. It could also produce a synergy that could lead to some great products.
There are a total of 3 major GPU companies in the world. Intel has the most (low-end) GPU market share, follows by nVidia (for now), then AMD.
#1 & #2 merging in an industry of only 3? As much as Otellini and Huang hated each other. They would both benefit from the merge (Huang will insist that he’ll be the new CEO) but no saint antitrust regulator in the world would ever let that happen.
Intel has about $12.9 billion in cash and short term investments. Subtract from that the $1.25 billion that they paid AMD, and then Intel has about $11.6 billion. For that amount, they could buy NVidia outright, with a 34% premium.
Or Intel could go sell debt to raise the money. A powerful, and more importantly, profitable company would have no trouble raising the money.
Or Intel could strike a licensing deal with NVidia instead of buying them outright.
While there is a possibility that Intel could buy NVidia, I do not think that it is a probability. NVidia is no threat to Intel without a CPU.
Yes, AMD/ATI will have Fusion in the near future, but Intel is profitable while AMD is unprofitable. Intel could sell a comparable CPU with one of their poor performing GPUs for equal or less cost than AMD. After all, most people do not need powerful graphics chips. They just need graphics chips that are good enough.