Intel backs SambaNova with $350M to challenge Nvidia's grip on AI chip market

Intel Doubles Down on SambaNova Partnership

Intel CEO Lip-Bu Tan is strengthening the company's position in the AI chip market through a strategic investment in AI chip startup SambaNova1

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. Intel is participating in a $350 million funding round for SambaNova, marking a significant expansion of a relationship that began when Tan first invested in the company eight years ago1

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. Intel initially invested in SambaNova in 2019, and Tan currently chairs the startup's board1

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. As part of the new multi-year collaboration announced Tuesday, SambaNova agreed to adopt Intel server processors and graphics cards, creating a deeper product partnership between the two companies1

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Strategic Move to Challenge Nvidia's AI Dominance

The collaboration represents Intel's latest effort to challenge Nvidia in the artificial intelligence market, where Nvidia's GPUs have long dominated1

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. Nvidia became the first company to reach a $4.5 trillion market cap last October, underscoring its commanding position in AI infrastructure1

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. Intel has sought additional partnerships to compete more effectively in the AI Arms Race, while also developing its own graphics card, as Tan revealed earlier this month at a Cisco event1

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. The demand for AI compute appears to be accelerating across the semiconductor sector, with Intel reportedly already sold out for the year after raising server CPU prices by 10% to 15%2

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SambaNova Unveils Performance-Focused SN50 Chip

SambaNova is promoting its new SN50 chip as a direct competitor to Nvidia's B200 GPUs based on Blackwell architecture1

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. The company claims the SN50 delivers five times faster performance than competitive inference chips and can run AI inference at three times lower cost than GPUs, providing greater computing power at the same price point1

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. Intel and SambaNova announced plans to deliver high-performance, cost-efficient AI inference solutions for AI-native companies, model providers, enterprises, and government organizations worldwide, built around Intel Xeon-based infrastructure2

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. SoftBank, an OpenAI investor and existing SambaNova customer, plans to deploy the SN50 in its data centers in Japan, becoming the first customer to implement the new chip1

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Intel Stock Rally Reflects Sector Momentum

The Intel stock rally contributed to shares climbing 5.35% to $45.96 following the announcement, with Intel rising along with the broader semiconductor sector1

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. Intel's stock has climbed 80% over the past year, backed by U.S. government and Nvidia investments1

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. However, DA Davidson analyst Gil Luria initiated coverage on Intel with a Neutral rating and a $45 price forecast, describing Intel as a "show me" story where investors want more evidence of sustained execution1

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. Intel also gained support from renewed optimism after major tech companies outlined aggressive AI spending plans, with Wedbush analyst Dan Ives expecting Big Tech spending to reach $550-$600 billion in 2026, up from about $380 billion in 20251

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Industry Growth and Previous Acquisition Talks

The Semiconductor Industry Association reported global chip sales of $791.7 billion in 2025 and forecast 26% growth in 2026, putting the industry on pace to approach $1 trillion in annual revenue as AI and data center demand expand1

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. Bloomberg reported in January that Intel previously explored acquiring SambaNova for $1.6 billion, but the talks did not result in a deal1

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. In the agentic inference era, Intel may have a promising new growth area even without leading AI GPUs, though Tan reiterated that Intel is still going to build AI GPUs as well2

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. Intel CFO David Zinsner is speaking at the Morgan Stanley Technology, Media, and Telecom conference on March 4, where he may share more details about this collaboration2

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