Intel (INTC) Stock: Chipmaker Nearing $1.6 Billion Acquisition of AI Startup SambaNova

TLDR

• Intel is in advanced talks to acquire AI chip startup SambaNova Systems for approximately $1.6 billion including debt, with a deal potentially closing next month
• SambaNova, founded in 2017 by Stanford professors, designs custom AI chips to compete with Nvidia’s offerings
• Intel CEO Lip-Bu Tan serves as chairman of SambaNova, and his venture capital firm was an early investor in the company
• The acquisition price represents a steep discount from SambaNova’s 2021 valuation of $5 billion during a SoftBank-led funding round
• Intel’s stock has surged roughly 60% since August when the U.S. government announced plans to take a 10% stake in the chipmaker

Intel is closing in on a deal to buy artificial intelligence chip startup SambaNova Systems for about $1.6 billion. The acquisition includes debt and could wrap up as soon as next month.

Sources familiar with the negotiations say the discussions are advanced. However, terms and timing could still shift.

Intel Corporation, INTC

SambaNova has other options on the table too. The Palo Alto-based company has signed term sheets with potential financial investors and might choose a different route.

Both Intel and SambaNova representatives declined to comment on the talks.

The deal would give Intel a ready-made AI chip platform at a bargain price. SambaNova was valued at $5 billion back in 2021 when SoftBank’s Vision Fund 2 led a $676 million funding round.

That’s a 68% drop from its previous valuation. For Intel, it’s a chance to grab AI technology on the cheap.

The SambaNova Connection

SambaNova was founded in 2017 by Stanford University professors. One of the founders even won a MacArthur Genius Award.

The startup builds custom AI chips designed to compete with Nvidia’s products. That makes it an attractive target for Intel as it tries to catch up in the AI race.

Here’s where it gets interesting. Intel CEO Lip-Bu Tan is actually SambaNova’s chairman.

His venture capital firm Walden International was one of the company’s first backers. Walden led a $56 million Series A round in 2018.

Tan joined Intel in March after building a reputation as a savvy venture capitalist. His deep tech industry connections made him an appealing choice for CEO.

Intel’s Stock Performance

Intel’s shares have jumped about 60% since August. That’s when the U.S. government announced it would take a 10% stake in the chipmaker.

The stock closed at $37.81 on Friday, down 4.3%. That gives Intel a market value of $180 billion.

The government investment marked a turning point for Intel’s stock performance. Shares had struggled before the announcement.

The deal discussions come as Intel works to strengthen its position in AI chips. The company has lagged behind rivals like Nvidia in this fast-growing market.

SambaNova’s technology could help Intel close that gap faster than building everything from scratch. The startup’s chips aim to offer a viable alternative to Nvidia’s dominant products.

The acquisition would give Intel immediate access to SambaNova’s custom chip designs and engineering talent. It would also bring proven technology that’s already in development.

The talks are happening while SambaNova weighs multiple paths forward. The company could still decide to take on new investors instead of selling.

Intel fell 4.3% to $37.81 on Friday, giving the company a market value of $180 billion.

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