In 2005, Intel had an offer to buy Nvidia for $20 BILLION
But the company's board rejected it saying it was "too expensive"
In 2025, Intel has lost $23 billion, fired 25% of its staff, and needs a bailout
Nvidia just gave them a $5 billion lifeline, but why?
1/8
But the company's board rejected it saying it was "too expensive"
In 2025, Intel has lost $23 billion, fired 25% of its staff, and needs a bailout
Nvidia just gave them a $5 billion lifeline, but why?
1/8
First, understand how bad Intel's situation is
-Fired 25% staff
-Market cap down from $250B to $115B
-Lost $19B in 2023, another $3.7B in 2024
-Shut down entire divisions US government had to buy 10% stake for $8.9B without which Intel was heading for bankruptcy
2/8
-Fired 25% staff
-Market cap down from $250B to $115B
-Lost $19B in 2023, another $3.7B in 2024
-Shut down entire divisions US government had to buy 10% stake for $8.9B without which Intel was heading for bankruptcy
2/8
Meanwhile, look at Nvidia,
-Market cap: $4.1 TRILLION, that's 40x Intel's entire value
-Controls 95% of AI chip market, every tech giant DEPENDS on them
But then why is Nvidia throwing money at a dying competitor?
3/8
-Market cap: $4.1 TRILLION, that's 40x Intel's entire value
-Controls 95% of AI chip market, every tech giant DEPENDS on them
But then why is Nvidia throwing money at a dying competitor?
3/8
Well, here's why they are doing
Nvidia is NOT buying Intel shares at market price. They're paying $23.28 per share while the current price is $31
Nvidia negotiated a DISCOUNT on a company already 60% down! It's a steal deal for Nvidia
4/8
Nvidia is NOT buying Intel shares at market price. They're paying $23.28 per share while the current price is $31
Nvidia negotiated a DISCOUNT on a company already 60% down! It's a steal deal for Nvidia
4/8
But what will Nvidia do with a stake in Intel?
Well, that too is interesting
Intel owns massive x86 patents.
If Intel dies, those patents would get auctioned. And you know who might buy them?
Well, Nvidia's competitors. And Nvidia can't let that happen
5/8
Well, that too is interesting
Intel owns massive x86 patents.
If Intel dies, those patents would get auctioned. And you know who might buy them?
Well, Nvidia's competitors. And Nvidia can't let that happen
5/8
There is another thing Nvidia is looking for
Nvidia currently relies 100% on TSMC for manufacturing. That's a massive risk with Taiwan-China tensions
Intel has fabs in US, Europe, Israel, etc. By keeping Intel afloat, Nvidia keeps a backup option
6/8
Nvidia currently relies 100% on TSMC for manufacturing. That's a massive risk with Taiwan-China tensions
Intel has fabs in US, Europe, Israel, etc. By keeping Intel afloat, Nvidia keeps a backup option
6/8
The weird thing is, in 2005 Paul Otellini, then Intel CEO, begged their board to buy Nvidia
The Board rejected it saying that Nvidia is operating in a very narrow niche and are too expensive to at $20B
Instead they wanted to focus on an internal project Larrabee
7/8
The Board rejected it saying that Nvidia is operating in a very narrow niche and are too expensive to at $20B
Instead they wanted to focus on an internal project Larrabee
7/8
Larrabee was Pat Gelsinger's (current CEO) project, but nothing came out of it, and they spent $10 billion on it
People talk about Yahoo not buying Google, but I think this story also turned out equally disastrous, what do you think?
8/8
People talk about Yahoo not buying Google, but I think this story also turned out equally disastrous, what do you think?
8/8
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