Intel’s Nvidia Deal Puts This Business Unit on Death Row

Intel's landmark partnership with Nvidia spells trouble for one of its core divisions—and the implications ripple across the tech landscape.

The Chip Shakeup

When industry giants collide, casualties follow. Intel's strategic alignment with Nvidia creates immediate redundancies in their existing infrastructure. Internal teams brace for consolidation as overlapping technologies face the chopping block.

Market Fallout

Supply chain partners scramble to adjust forecasts while competitors circle like vultures. The deal accelerates Intel's pivot toward AI-focused architectures—leaving legacy operations twisting in the wind. Analysts note the timing coincides perfectly with quarterly earnings season—how convenient for burying bad news.

Finance's Ironic Twist

Wall Street cheers the partnership while quietly shorting the very assets Intel's abandoning. Another masterclass in corporate restructuring where executive bonuses remain untouched but R&D budgets vanish faster than a crypto bull market.

Image source: Getty Images.

An unclear future

Intel sells CPUs with its own integrated graphics technology, and it also broke into the discrete graphics card market a few years ago with its Arc line of GPUs. The first generation of Intel's Arc GPUs was plagued with software issues, while the second generation has garnered positive reviews. Intel focused on the mid-range portion of the market, offering a compelling alternative to Nvidia andgraphics cards.

Unfortunately for Intel, it hasn't gained any meaningful share of the discrete graphics card market. In the first quarter, Intel's GPU unit share rounded down to 0%, according to Jon Peddie Research. Nvidia dominates the market, and PC gamers may still be reluctant to try an Intel GPU due to the history of software issues.

The deal with Nvidia doesn't cover discrete graphics cards, but partnering with a competitor raises questions about how serious Intel is about staying in the discrete graphics card market. It also raises questions about whether it will continue to invest in its own graphics technology for its CPUs.

Once CPUs with Nvidia graphics start shipping, it's unclear whether Intel will continue to invest in its in-house graphics. An Intel CPU with Nvidia graphics should be an appealing product, but it could reduce demand for Intel's non-Nvidia CPUs. Intel could also end up scrapping its discrete graphics card business, given that its main competitor is now a partner.

Not without risks

The deal with Nvidia makes a lot of sense for Intel. The company has lost considerable PC CPU market share to AMD, so upping its graphics performance with Nvidia's GPUs should help Intel strengthen its position, particularly in the laptop market.

If Intel ends up pulling back on its own graphics technology, that move WOULD reduce costs at the expense of the company becoming dependent on Nvidia, which is buying a $5 billion stake in Intel as part of the deal, so this appears to be a long-term arrangement. Even so, outsourcing graphics entirely could come back to bite Intel down the road.

Despite the deal with Nvidia, Intel may choose to keep plugging away in discrete graphics cards and to keep developing its own graphics technology. But with the company eyeing noncore businesses to dump, graphics could very well be next.