Dylan Patel on the AI Chip Race - NVIDIA, Intel & the US Government vs. China
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What is the significance of Nvidia’s $5 billion investment in Intel and the new partnership?
How you buy GPUs is like buying cocaine. You call up a couple of people, you text a couple of people, you ask, yo, how much you got, what's the price.
If your two arch nemesis suddenly team up, I mean it's the worst possible news you can have. I did not see this coming. I think it's uh it's amazing development.
Like a Ward Buffet coming into a a stock. Jensen is like the buffet effect for the semiconductor world.
It's kind of poetic that everything's gone full circle and Intel's sorta crawling to NVIDIA.
Today, we're talking about one of the biggest surprises in semiconductors in years. Nvidia just put 5 billion into Intel. Two long-term rivals now teaming up on custom data centers and PC products, a deal nobody saw coming. For NVIDIA is the Buffett effect. For Intel, it's a lifeline. And for AMD, ARM, and the global chip race, the fallout could be massive. Break it all down, I'm joined by Dylan Patel, Chief Analyst at Semi-Analysis, Sarah Wang, General Partner at A16Z, and Guido Appenzeller, partner at A16Z and former CTO of Intel's Data Center and AI Business Unit. Let's get into it.
Dylan, welcome back to the podcast. Thanks for having me. Yeah. Uh just so happens that there's some big news, just as we're as we're having you, NVIDIA uh uh announcing five billion dollar investment in Intel and them teaming up to jointly develop custom data centers and B C products. What do you think about the collaboration?
I think I think it's hilarious that like NVIDIA could invest, it gets announced, and their investment's already up thirty percent. Five million dollar investment, two billion dollar profit already, right? Like I think it's fun because uh they need their customers to really uh have big buy-in. So when their custom potential customers uh buy in and commit to certain types of products, it makes a lot of sense, right? And it's kind of uh funny in a way because in the past, um There was this whole like thing around how Intel was sued for being uh anti-competitive with their chipsets. And NVIDIA actually got like a settlement from NVIDIA uh Intel, right? Way back when when like the graphics were separate from the GPU and the the gra the graphics were really put on the chipset, which had like all this other IO, um like USB and all this stuff.
Um So so it's kind of a a a a funny like turn of events that now Intel is going to make like a chiplet and package it alongside a chiplet from from NVIDIA and then that's like a PC product, right? So You know, it's kind of poetic that everything's gone full circle and Intel's sort of crawling to NVIDIA. But actually it might just be the best like device, right? Um I don't want an ARM laptop because it can't do a lot of things. And so an X eighty six laptop with NVIDIA graphics fully integrated would be probably the best product in the market. Um Sir are you optimistic? How how do you think this will go? mean, sure. I mean I hope I hope, right? I'm I'm I'm I'm a perpetual optimist on Intel because uh have to be.
I was thinking that uh the structure of the deal that at least like a lot of the government folks and uh Intel were sort of trying to go for was people give you know, c big customers and the biggest suppliers directly give capital to Intel. Um, but this is sort of the other way around where they're buying some of the stock uh having some ownership but they're not really like diluting the other shareholders. And then the other shareholders will get diluted, slash everyone will get diluted when Intel finally does raise the capital from the capital markets. But because they've announced these deals and they're pretty small, right? Five billion NVIDIA, two billion soft bank, um US government was 10. Um, you know, these these are still relatively small.
Pretty small, yeah. Yeah. On the nature of things, right? I mean, like uh, you know, last time I think I said Intel needs like fifty billion dollars, right? Now now when they go to the capital Apple markets, it's it's better and may and and and hopefully they get another you know couple of these announcements.
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Chapters
8 chapters
1
What is the significance of Nvidia’s $5 billion investment in Intel and the new partnership?
0:00–4:40
2
How are China, Huawei, and U.S. export bans influencing the AI chip landscape?
4:40–12:31
3
Why is Jensen Huang’s leadership considered a moat for Nvidia and how has the company built it?
12:31–30:29
4
What are the long‑term growth prospects for Nvidia’s AI infrastructure and cash‑flow strategy?
30:29–50:31
5
Why does Dylan Patel argue that Nvidia should focus on data‑center capacity instead of picking AI winners?
50:31–1:03:51
6
How does the panel explain Oracle’s massive AI‑compute bet and its data‑center strategy?
1:03:51–1:14:52
7
What is the new CPX compute‑optimized chip and why does it matter for pre‑fill vs. decode workloads?
1:14:52–1:26:53
8
How do the hosts wrap up the discussion on current GPU cycles and future outlook?
1:26:53–1:39:53
Speakers
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