Shares of Intel (INTC +2.53%) were rallying on Tuesday, up 5.5% as of 12:52 p.m. EDT.
Intel rose along with the rest of the semiconductor sector, which was generally up strongly today. In particular, Intel may be rising in sympathy with Advanced Micro Devices (AMD +1.83%), which rallied on the back of a massive deal announcement with Meta Platforms (META +0.29%).
However, Intel also announced an interesting partnership of its own, which may also be contributing to gains.
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AMD dances with Meta, while Intel dances the SambaNova
Today, AMD announced a massive multi-year, six-gigawatt deal for AMD's Helios rack systems to be deployed in Meta's AI infrastructure. For reference, CEO Lisa Su noted that each gigawatt translates to "double-digit billions" in revenue to AMD. As a sweetener for Meta, Meta was also granted a performance-based warrant to purchase 160 million AMD shares, representing about 10% of the company. The deal is practically identical to the deal AMD struck with OpenAI back in October.
Some could interpret this as a competitive win for AMD over Intel, but it seems more like Meta buying a second source of GPU-based systems outside Nvidia (NVDA +0.88%). Investors seem to be taking the deal as a signal of massive AI computing demand, which could lift all boats, including Intel's. And with Meta now committing to this enormous amount of compute for Meta, that could free up Intel to sell to other players, given industry supply constraints.
Meanwhile, Intel announced its own deal today, disclosing its participation in a $350 million funding round for AI chip start-up SambaNova, along with a new product partnership to integrate SambaNova into Intel's new inference systems. In the press release, Intel said:
SambaNova and Intel announced a planned multi-year strategic collaboration to deliver high-performance, cost-efficient AI inference solutions for AI-native companies, model providers, enterprises, and government organizations worldwide, built around Intel Xeon-based infrastructure.
In conjunction with the announcement, SambaNova also unveiled its new SN50 inference chip, which it claims is five times faster than "competitive" inference chips, and can run AI inference at "three times lower cost" than GPUs.
SambaNova also announced that Softbank (OTC: SFTB.Y) would be the first customer to implement the SN50 in its data centers in Japan. Of note, Softbank invested $2 billion in Intel last summer.
Image source: Getty Images.
Agentic AI should lift Intel this year
The demand for AI compute appears to be accelerating and broadening, with GPUs, memory, and now even CPUs in short supply. Intel itself is severely capacity-constrained, just raised its server CPU prices by 10% to 15%, and is reportedly already sold out for the year.
In the agentic inference era, Intel may indeed have a promising new growth area even without leading AI GPUs. But of course, CEO Lip-Bu Tan also recently noted Intel is still going to build AI GPUs as well, and reiterated that in today's press release.
Of note, CFO David Zinsner is speaking at the Morgan Stanley Technology, Media, and Telecom conference next week on March 4, where he may share more details about this new partnership.
