In a strategic move to regain ground in the silicon wars, Intel is finalizing a deal to acquire AI specialist SambaNova Systems at a steep discount.
SANTA CLARA - In a decisive move to salvage its position in the rapidly evolving artificial intelligence market, Intel Corporation is reportedly finalizing an agreement to acquire AI chip startup SambaNova Systems. According to reports from Bloomberg and Seeking Alpha emerging in mid-December 2025, the semiconductor giant is in advanced discussions to purchase the Palo Alto-based company for approximately $1.6 billion. The deal represents a significant strategic pivot for Intel as it attempts to narrow the widening gap between itself and market leader Nvidia.
The acquisition comes at a critical juncture for Intel. Having missed early opportunities in the mobile revolution, the company is scrambling to avoid a similar fate in the AI era. While the deal is not yet finalized, sources indicate that a term sheet has been signed, marking the chipmaker's boldest attempt yet to integrate a full-stack AI hardware and software solution into its struggling foundry and enterprise offerings.
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The financial contours of the proposed acquisition reveal the turbulent nature of the current AI hardware market. Bloomberg reports that the deal values SambaNova at roughly $1.6 billion, a figure that includes debt. This pricing stands in stark contrast to SambaNova's 2021 funding rounds, where the startup commanded a valuation exceeding $5 billion. The steep discount suggests that while Intel is eager to acquire talent and intellectual property, the market for standalone AI chip startups has cooled significantly amid Nvidia's dominance.
According to WIRED, Intel signed the term sheet in early December, though the agreement remains nonbinding. The acquisition targets SambaNova's integrated approach, which combines custom chips, software, and pre-trained models-a holistic strategy that Intel hopes will complement its existing Gaudi accelerator line.
"Any deal would likely value SambaNova at below the $5 billion it fetched in a 2021 funding round... deliberations are in the early stages." - Reuters (October 2025)
This is not Intel's first attempt to buy its way into AI relevance. In 2019, the company acquired Israeli chipmaker Habana Labs for $2 billion. Despite this, Intel has struggled to gain meaningful market share against Nvidia. The New York Times highlighted in October 2024 that the Habana acquisition faced internal friction and failed to deliver the "Nvidia-killer" product the market anticipated.
Recent internal politics have also influenced this move. Reuters reported that former board member Lip-Bu Tan had actively pitched the SambaNova acquisition to Intel's board. Tan, who served as executive chairman for SambaNova, argued that Intel needed external innovation because its in-house efforts were faltering. His push for the deal, alongside other strategic disagreements, reportedly contributed to friction within the company's leadership earlier this year.
The scale of Intel's investment pales in comparison to its competitors' moves. In late December 2025, CNBC reported that Nvidia is buying AI chip startup Groq's assets for approximately $20 billion-a deal more than ten times the size of Intel's SambaNova play. This disparity underscores the massive capital advantage Nvidia holds, allowing it to consolidate the market aggressively while Intel looks for value plays to plug gaps in its portfolio.
Industry analysts view the acquisition as a "make or break" moment for Intel's data center group. Techbuzz describes the move as Intel's "boldest move yet to close the AI chip gap." The acquisition brings SambaNova's "DataScale" systems, which are designed for large language model training and inference, directly under Intel's umbrella.
However, skepticism remains. The Motley Fool notes that Intel's track record with acquisitions is "not great," citing the company's history of struggling to integrate acquired startups effectively. The challenge for Intel will not be in the purchase, but in the execution-specifically, whether they can retain SambaNova's engineering talent and integrate their software stack with Intel's OneAPI ecosystem without the delays that plagued previous mergers.
If the deal closes as expected in early 2026, it will likely lead to a consolidation of Intel's AI roadmap. We can expect SambaNova's technology to be pitched to enterprise customers who are looking for alternatives to the supply-constrained and expensive Nvidia H100/H200 ecosystem. Furthermore, with reports from CNBC indicating that Nvidia recently invested $5 billion in Intel as part of a manufacturing partnership, the relationship between the two giants is becoming increasingly complex-simultaneously competing for chip design dominance while collaborating on fabrication.
For the broader technology market, Intel's purchase signals a potential "fire sale" period for AI hardware startups that raised capital at high valuations but failed to secure significant market share against the Nvidia monopoly. As Intel retools its foundry and engineering culture, the success of the SambaNova integration will serve as a bellwether for the company's ability to survive in the AI-first economy.
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