The upcoming chips will enhance Microsoft’s efforts to help chip companies build Arm-based processors for PCs running on Windows as well as strengthen Nvidia’s position in competing with Apple.
AI hardware and software supplier Nvidia Corporation (NASDAQ: NVDA) has reportedly started working on chips for Windows PCs. According to Reuters, the company has ‘quietly begun’ designing central processing units (CPUs) that will employ technology from Arm Holdings Ltd., the renowned chip designer owned by SoftBank Group Corp (TYO: 9984). The chips are scheduled for launch as soon as 2025.
The upcoming chips will enhance Microsoft Corporation‘s (NASDAQ: MSFT) efforts to help chip companies build Arm-based processors for PCs running on Windows as well as strengthen the company’s position in competing with Apple Inc (NASDAQ: AAPL) which has recently signed a new deal with Arm for chip technology that ‘extends beyond 2040.’ Apple started using ARM chips in its Newton handheld computer back in 1993 and now has its own Arm-based chips in-house for its Mac computers.
Back in 2016, Microsoft partnered with Qualcomm Inc (NASDAQ: QCOM) to make Windows compatible with Arm-based processors. Within the partnership, Qualcomm had an exclusive arrangement to create Windows-compatible Arm processors until 2024. But Microsoft has been encouraging other companies to develop their own ARM-based CPUs ahead of that deal expiring next year. As a result, Nvidia has a great opportunity to work with Microsoft.
Jay Goldberg, chief executive of consulting firm D2D Advisory, commented:
“Microsoft learned from the 90s that they don’t want to be dependent on Intel again, they don’t want to be dependent on a single vendor. If Arm really took off in PC (chips), they were never going to let Qualcomm be the sole supplier.”
Nvidia is working on Arm-based chips simultaneously with Advanced Micro Devices (NASDAQ: AMD) which will also employ Arm technology and release the chips for PCs in 2025. The news about both companies preparing for the launch has fueled their stock prices to soar and affected the shares of another chip-making giant Intel Corporation (NASDAQ: INTC). Yesterday, Nvidia stock closed the session 3.84% up, at $429.75 per share. After hours, NVDA shares are 0.69% up. AMD stock dropped by 1.77% at the close yesterday but added 0.39% after hours. Meanwhile, Intel stock was 3.06% down yesterday, closing the session at $33.85 per share. After hours, Intel stock is 0.01% down.
Nvidia Expanding AI Partnerships
Nvidia is now looking for more opportunities in the AI industry, expanding its existing partnerships and looking for new collaborations.
In August, Nvidia teamed up with Google Cloud to launch new AI infrastructure and software for customers to build and deploy massive models for generative AI and speed data science workloads. Besides, the companies announced Google’s integration of serverless Spark with NVIDIA GPUs through Google’s Dataproc service.
Last week, Nvidia also partnered with Foxconn to build AI-powered data centers for a wide range of applications, including electric vehicle platforms. The companies will establish AI factories that will receive and process data from EVs to make the vehicles smarter. The partnership also extends to manufacturing smart robotic systems.