Intel stock dropped after Nvidia announced server chip

Intel stock closed down on Monday after Nvidia announced that they would make its server CPU based on ARM technology. Nvidia’s shares rose 5.62%.

According to estimates, its new server processor is its first data center CPU, challenging Intel in a market that dominates with more than 90% market share. Intel reported $26.1 billion in revenue from its data center group in 2020, up 11% year over year. Nvidia said its chips would use the ARM instruction set, which differs from the x86 instructions at Intel processors’ heart. The company isn’t directly triggering the Intel or AMD EPYC server market. Instead, they build their chip to complement their GPU offerings, creating a specialized chip that can now connect to their GPU and handle enormous A.I. models.

The company made it clear earlier that, for NVIDIA, the Grace is an internal product. They added that if things don’t go as planned, at least for now, they have the Grace, which is a part of more extensive server offerings.

What does Nvidia do?

Nvidia is famous for chips and graphics processors for artificial intelligence, not the CPUs that power computers’ hearts.

After Grace Hopper, Dubbed Grace is considered the pioneer and the U.S. Navy admiral in computer programming. The CPU is NVIDIA’s latest feature that offers a high-performance CPU with its regular GPU wares.

According to NVIDIA`s announcement, they designed the chip for large-scale neural network workloads. The company plans to make the product available in 2023.  The chip will be ready in two years, but before, NVIDIA offers only limited details for this chip. Therefore, today’s announcement is more focused on NVIDIA’s future model than the speeds and feeds of the available products.

The graphics and designers are announcing that, once again, they will design their Arm-based CPU/SoC.
In a statement, Nvidia CEO Jensen Huang said that Grace with the GPU and DPU gives them the third foundational technology that is for computing and can re-architect the data center to advance A.I. He added that now  NVIDIA is a three-chip company.

Nvidia said in its statement that some researchers, including the U.S. Department of Energy’s Los Alamos National Laboratory, are planning to build supercomputers that will use the Grace chips.

Last year Nvidia announced that it plans to buy ARM for $40 billion. The company also added that it would continue to license its technology to chipmakers such as Apple and Qualcomm that rely on it. Even though ARM-based chips are dominant components in smartphones, companies don`t use them in data centers.