By Stephen Nellis and Max A. Cherney
(Reuters) – Nvidia is known for its dominance in the artificial intelligence computing chip market, and now it has set its sights on Intel’s stronghold in the personal computer market.
According to insiders, Nvidia has quietly started designing central processing units (CPUs) that would be compatible with Microsoft’s Windows operating system and utilize technology from Arm Holdings. This move is part of Microsoft’s initiative to assist chip companies in creating Arm-based processors for Windows PCs. Microsoft’s goal is to compete with Apple, which has significantly increased its market share by developing its own Arm-based chips for its Mac computers in recent years.
In addition to Nvidia, Advanced Micro Devices (AMD) also plans to manufacture chips for PCs utilizing Arm technology. It is expected that both companies may release their PC chips as early as 2025. Qualcomm, which has been producing Arm-based chips for laptops since 2016, will join them. At an upcoming event attended by Microsoft executives, Qualcomm plans to unveil more details about its flagship chip, designed by a team of former Apple engineers.
Following the Reuters report on Nvidia’s plans, Nvidia shares rose 4.4%, while Intel shares dropped 2.9%. Arm’s shares also saw an increase of 3.4%. Representatives from Nvidia, AMD, Arm, and Microsoft declined to comment on the matter.
With Nvidia, AMD, and Qualcomm entering the PC chip market, Intel’s long-standing dominance is likely to be challenged. Apple’s custom chips have demonstrated superior performance and energy efficiency in Mac computers. Microsoft executives have taken note of this and expressed their desire to achieve similar levels of performance, particularly in the field of AI processing.
In 2016, Microsoft enlisted Qualcomm to lead the initiative of transitioning the Windows operating system to Arm’s underlying processor architecture, which is commonly used in smartphones. Qualcomm was granted exclusivity to develop Windows-compatible chips until 2024. Once this exclusivity agreement expires, Microsoft plans to encourage other chip manufacturers to enter the market.
“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,” said Jay Goldberg, CEO of D2D Advisory. “If Arm really took off in PC (chips), they were never going to let Qualcomm be the sole supplier.”
Microsoft has been urging chipmakers involved in this endeavor to incorporate advanced AI features into the CPUs they’re designing. The company envisions AI-enhanced software, such as Copilot, becoming an integral part of the Windows experience. This requires the upcoming chips from Nvidia, AMD, and others to allocate on-chip resources for AI processing.
However, there are challenges ahead. Software developers have spent considerable resources developing code for the x86 computing architecture, owned by Intel but also licensed to AMD, which is incompatible with Arm-based designs. The transition to Arm-based PCs may require significant effort and resources.
Intel has also been incorporating AI features into its chips and has demonstrated laptops running AI-intensive applications like ChatGPT directly on the device.
Intel spokesperson Will Moss did not provide a comment, and AMD’s entry into the Arm-based PC market was previously reported by SemiAccurate, a chip-focused publication.
Reporting by Stephen Nellis and Max A. Cherney in San Francisco; Editing by Kenneth Li and Josie Kao
