5 ms·
Intel market cap: 91B NVidia market cap: 2.64T Antitrust issues aside, NVidia could acquire Intel for about 1/30th of their stock. That would result in having
by frognumber 2y ago
Intel market cap: 91B
NVidia market cap: 2.64T
Antitrust issues aside, NVidia could acquire Intel for about 1/30th of their stock. That would result in having an end-to-end platform play like AMD/ATI, about 5x the number of employees, a tremendous number of technologies (compilers, numerical libraries, etc.), massive diversification, and actually rather better fab access in both directions.
Thoughts?
- electriclove 2y agoWhy would Nvidia want 5x the employees?
- wkat4242 2y agoThey wouldn't but they could let some go. On the other hand they'd purchase the most common desktop ISA and a lot of IP. It would make so much sense. But like the OP said, antitrust is surely why they're not even trying. They already got slammed with ARM.
- frognumber 2y agoIt's unclear to me if that would help them expand and grow or if it'd be deadweight and overhead. FWIW, I was pointing out aspects of such an acquisition, and looking for honest thoughts. I have no idea if it's a good idea or bad idea. I'm really quite divided.
- azmodeus 2y agoIt could be a risk to their culture, Nvidia could become more like Intel instead of Intel becoming more like Nvidia
- passion__desire 2y agoNvidia, being the buying party, would dictate the direction of flow of cultural values.
- cityofdelusion 2y agoReally risky play. AMD took more than a decade to recover from the ATI acquisition. There isn’t that much business integration between GPU and CPUs, it’s why Intel has always struggled mightily to develop a competitive GPU themselves, financially speaking.
- deleted 2y ago[deleted]
- linotype 2y agoNVidia already has ARM chips. I’m sure they could build an X86 chip if they wanted to for significantly cheaper than 91B. Same with fab buildout.
- wkat4242 2y agoNvidia is clearly overvalued though due to the AI hype. On the other hand this would be a great time for such an acquisition, before the bubble bursts.
- frognumber 2y agoRemember when AOL bought Time Warner?
- wkat4242 2y agoNo I don't actually. I just looked it up, and I see I was backpacking the world at that time so it didn't really register. But I see it went very very wrong when the dotcom bubble burst. In Holland we had a similar thing happen (albeit at a much smaller scale) to the company World Online. They did an IPO and their stock tumbled into nothing. The CEO sold all her shares just before the IPO and was later challenged in court (though was acquitted I believe) It's a good point indeed. I forgot about all those (mainly due to my different focus in those days).
- frognumber 2y agoIt didn't go very wrong for the purchasing party -- AOL: * AOL was very, very overvalued. * They bought a company with real worth. * When the .com bubble popped, they were left with Time Warner. It'd be a dead company without it. On the other hand, it did very badly by Time Warner and its investors. There are two possibilities here: 1. AI is gold, and NVidia is leading AI. 2. AI is a bubble, and NVidia is overvalued by a factor of 10-100x. In the case of #2, buying Intel converts funny money into real value, gives Intel engineering capability it so obviously now lacks to continue to push x86 forward, and gives NVidia engineers many, many decades of x86 R&D. In that sense, it can be thought of as a hedge on AI not succeeding (or someone overtaking NVidia in AI). In the case of #1, it either gives NVidia huge marketing and distribution channels, an end-to-end platform play, and a bunch of supporting IP, while chaining it to an obsolete corporation with 5x the employees. It also allows NVidia to do some antitrusty things by connecting with the dominant CPU platform (e.g. making iGPU chips, and various sorts of hybrids where Intel + Nvidia work best together).
- lovethevoid 2y agoHave you been spending too much time on wallstreetbets? This doesn't make any logical sense, a sharp increase in numbers doesn't justify taking on 24bn net debt.
- frognumber 2y agoIt's not debt. You issue 24B in stock, and use that to pay for Intel. If investors think it's a good idea, market cap goes up by more than 24B. If not, by less. I am looking for honest thoughts. I have not been spending any time on wallstreetbets, and I had hoped for a good discussion of pros and cons. I have no clue if it's a good idea or bad. AOL / Time Warner comes to mind.
- sirspacey 2y agoI’m not an expert on either company, but as I see it NVIDIA has a massive scale of R&D that is very effective and meaningfully focused. Intel seems to be cutting a massive amount of R&D that went no where & also doesn’t seem to have a clear thesis about who they are in the future. Generally M&A’s argument is that it’s more capitally efficient to acquire. There’s certainly a a case to be made for that here, but having seen a few engineering teams post M&A it could actually be a poison pill for NVIDIA. I’d love to hear from other more informed people what I’m missing here.
- frognumber 2y agoHow about this: NVidia's focused R&D efforts to improve Intel platforms. The Intel platforms are still very, very good, and very, very hard to replicate. It took many decades of concerted optimization to get here. AMD is a little bit ahead right now, but it took many decades of R&D to get there. Other efforts to do so -- even when x86 was much simpler -- went nowhere. Remember WinChip, MediaGX, Geode, C3, C7, Nano, 5x86, 6x86, and that whole debacle of Intel-competing products?
- jsyang00 2y agoIt would be a management nightmare in addition to almost certainly getting blocked (maybe some chance under a Trump administration...?)
- deleted 2y ago[deleted]
- Ozarkian 2y agoIt's a terrible idea for Nvidia. Even if it was a good idea, there's no way that it would past antitrust review in Europe and the USA.
- Agingcoder 2y agoAntitrust issues ( or eu/china deciding they don’t want a fully integrated American giant ). This was already tried with arm, and failed.
- osnium123 2y agoI think China would rather see Intel go bankrupt.
- cedws 2y agoWhy would you want to bring aboard crew who sank their ship on to yours?
- roshankhan28 2y agoi guess they want to make another titanic movie? maybe i am wrong but who knows?