Intel stock drops after Nvidia announces server chip
- Nvidia plans to make its own server central processor, called Grace, based on ARM technology.
- The company is best known for graphics processors and chips for artificial intelligence, not the CPUs that power the heart of servers.
- The new processor is its first data center CPU, challenging Intel in a market which it dominates with more than 90% market share.
Intel stock closed down 4.18% on Monday on news that Nvidia plans to make its own server CPU based on ARM technology. Nvidia's shares ended the day up 5.62%.
Nvidia is best known for graphics processors and chips for artificial intelligence, not the CPUs that power the heart of computers.
Its new "Grace" server processor is its first data center CPU, challenging Intel in a market which it dominates with more than 90% market share, according to estimates. Intel reported $26.1 billion in revenue from its data center group in 2020, up 11% year over year.
Nvidia said its Grace chips would use the ARM instruction set, which differs from the x86 instructions at the heart of Intel processors.
"Coupled with the GPU and DPU, Grace gives us the third foundational technology for computing, and the ability to re-architect the data center to advance AI. NVIDIA is now a three-chip company," Nvidia CEO Jensen Huang said in a statement.
Nvidia said that researchers including the U.S. Department of Energy's Los Alamos National Laboratory plan to build supercomputers using the Grace chips.
Nvidia said last year that it plans to buy ARM for $40 billion, and the company would continue to license its technology to chipmakers that rely on it, including Apple and Qualcomm. ARM-based chips are dominant in smartphones but are not widely used in data centers.