In a bid to regain ground in the AI hardware race, Intel is reportedly in advanced talks to acquire chip startup SambaNova for a fraction of its previous valuation.
Intel Corporation is reportedly in the final stages of negotiating a strategic acquisition that could reshape its standing in the artificial intelligence hardware market. According to multiple reports surfacing this week, the semiconductor giant is in advanced talks to acquire AI chip startup SambaNova Systems for approximately $1.6 billion. The deal, which reportedly includes the assumption of debt, represents a significant aggressive maneuver by Intel to counter the dominance of Nvidia and AMD in the burgeoning sector of generative AI infrastructure.
Sources close to the negotiations indicate that while a term sheet has been signed, the agreement remains non-binding and could still dissolve. However, the move signals Intel's urgent necessity to integrate specialized AI capabilities into its product portfolio. If successful, the acquisition would bring SambaNova's integrated hardware and software solutions under Intel's roof, potentially accelerating the legacy chipmaker's roadmap in data center AI processing.
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The reported $1.6 billion price tag highlights a dramatic shift in the valuation landscape for AI hardware startups. SambaNova Systems, based in Palo Alto, was previously a darling of the venture capital world. In a 2021 funding round, the company was valued at over $5 billion. Intel's potential acquisition price suggests a steep discount, reflecting both the cooling of broader private market valuations and the specific challenges smaller hardware firms face in competing with entrenched giants like Nvidia.
According to Bloomberg, the deal structure includes debt, which suggests Intel is looking for a comprehensive takeover of SambaNova's balance sheet. Reports from Wired indicate that the companies have signed a term sheet, a major step toward finalization, though TechPowerUp cautions that "a final deal has not yet been reached" and the talks remain private.
A crucial element of this negotiation is the existing leadership overlap between the two entities. According to reports from Techzine Global and Heise Online, Intel CEO Lip-Bu Tan also serves as the Chairman of SambaNova Systems, a position he has held since May 2024. This existing relationship may be facilitating the talks, with Heise Online noting that Intel is likely acquiring the technology "relatively cheaply... due to the entanglements between the two companies."
"The acquisition of SambaNova would deliver Intel a long-sought platform to help build out its AI product offering - and at a discount," noted analysts cited by Yahoo! Finance.
SambaNova is known for its "Data Scale" systems and specialized chips designed to run large AI models more efficiently than general-purpose GPUs. For Intel, acquiring this technology offers a shortcut to a more robust AI stack. While Intel has its own Gaudi accelerator line, the market share gap with Nvidia remains enormous. WebProNews reports that this move is specifically designed to "strengthen its position against Nvidia and AMD in the competitive AI hardware market" amid Intel's broader financial struggles.
If completed, this acquisition would mark a consolidation phase in the AI hardware industry. Startups that raised massive capital during the initial AI boom are now facing the reality of manufacturing and distribution costs that only giants like Intel can sustain. For the broader technology sector, this indicates that the race to power Large Language Models (LLMs) is moving from a phase of experimentation to one of industrial scaling and consolidation.
However, risks remain. Intel has a mixed history with acquisitions, and integrating SambaNova's unique architecture with Intel's existing OneAPI and hardware ecosystem will be an engineering challenge. Furthermore, the deal is not yet closed. As Reuters reported, "deliberations are in the early stages and there's no certainty the companies will reach an agreement."
Investors and industry watchers will be looking for an official announcement in the coming days. Key details to watch will include the final valuation, the fate of SambaNova's existing customer contracts, and how the leadership structure will evolve given the CEO's dual roles. If finalized, this $1.6 billion bet could be the lifeline Intel needs to remain relevant in the AI era, or a costly distraction in its turnaround efforts.
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