Triple threat: NVIDIA to start making Arm-based processors for PCs, to take on Intel, AMD’s core business

In a bold move that promises to intensify the competition in the semiconductor industry, NVIDIA is harnessing Arm Holdings PLC’s technology to create chips poised to challenge Intel’s dominance in the realm of personal computers. Anonymous sources privy to the matter have told Bloomberg of this strategic development, which marks a significant step towards the rivalry between these two tech giants. NVIDIA, renowned for its artificial intelligence accelerator chips that have already secured a commanding presence in the AI market, has set its sights on producing central processing units (CPUs) tailored for personal computers. These unnamed sources have disclosed that these CPUs are engineered to run Microsoft’s Windows operating system, with a targeted release date as early as 2025. AMD, Intel’s primary competitor in the PC sector, is also making strides in Arm-based processors, according to these sources. This marks a noteworthy shift for AMD, which has traditionally licensed Intel’s technology. The unveiling of this development sent shockwaves through the investment community, leading to a 3.1 per cent drop in Intel shares on Monday. While the use of Arm technology in the PC processor industry is not entirely novel, previous attempts by various companies have yielded limited impact. NVIDIA itself embarked on a similar endeavor more than a decade ago, under the leadership of former executive Rene Haas, who now presides over Arm. It’s worth noting that Microsoft introduced Windows RT, designed to operate on Arm-based designs, at the 2011 CES show. On the other hand, Apple presents a more recent and successful case of transitioning from Intel technology. Apple transitioned from Intel processors in its Mac computers to in-house designs rooted in Arm’s standards, a shift credited with driving increased Mac sales. Currently, Qualcomm Inc., the leading manufacturer of phone chips, is the sole producer of Arm-based chips for Windows-based PCs, after from Apple Reuters previously reported on NVIDIA’s foray into this arena, an announcement that boosted Arm’s shares by 4.9 per cent in New York and saw NVIDIA’s stock rise by 3.8 per cent. Representatives from AMD, Arm, and NVIDIA declined to provide comments on this development. This strategic move by NVIDIA signifies a direct assault on Intel’s traditional stronghold at a time when the PC processor pioneer, under the leadership of CEO Pat Gelsinger, is diligently striving to regain market share and technological supremacy. The entry of NVIDIA and AMD into this domain, alongside established players like Apple and Qualcomm, adds further complexity to Intel’s challenges. NVIDIA, currently the world’s most valuable chipmaker with a market capitalization of approximately $1.1 trillion, presents a formidable adversary. The company leveraged its supremacy in graphics cards for gaming to develop chips capable of fueling AI computing, resulting in a surge in demand as tech companies across the globe integrate artificial intelligence tools that necessitate greater processing power. Earlier this year, NVIDIA became the first chipmaker to attain a $1 trillion valuation. In contrast, Intel has witnessed a decline in its market valuation in recent years. Even with a resurgence in 2023, the company presently stands at approximately $142 billion. Adding to this dynamic landscape is AMD, which, under the leadership of CEO Lisa Su, has shed its historical image as a budget-friendly Intel competitor. AMD has introduced multiple product generations that have successfully captured market share. Although AMD had previously considered Arm-based products, the company shelved those plans. More recently, Su has expressed the willingness to produce customized products with a blend of technologies, including Arm, if requested by customers. As per informed sources, similar to NVIDIA’s PC chips, Arm-based processors are expected to hit the market as early as 2025.