Nvidia is developing arm-based chips that would compete with Intel processors in personal computers, intensifying the rivalry between the two chipmakers, sources familiar with the matter said.
The anonymous sources said that Nvidia, which already is a market leader in the artificial intelligence chips segment, is attempting to make central processing units for PCs.
The CPUs would support Microsoft’s Windows operating system and could be available by 2025.
Nvidia is one of many businesses with skin in the game.
The sources say that Advanced Micro Devices (AMD), Intel’s main PC competitor, is also working on Arm-based processors.
As soon as this information was released, investors got spooked because other companies trying similar strategies had failed. The news caused Intel shares to drop 3.1%.
Apple demonstrated how to replace Intel technology with its own designs based on Arm’s standards in its Mac computers, and the switch even boosted Mac sales.
If Nvidia is successful, Intel will have a new challenger on its hands, and the move would challenge Intel’s core market at a time that has been tough for the PC processor pioneer attempting to regain market share.
Nvidia was the first chipmaker to reach a $1 trillion valuation earlier this year. On the other hand, Intel has seen its value decline in recent years and is worth about $142 billion.
AMD also poses a threat to Intel because, under the discerning rule of CEO Lisa Su, the company has changed its image as a low-cost alternative to Intel and delivered several products that have won market share.
AMD had previously said it would think about Arm-based products but stopped that effort.
More recently, Su has said that the company would rise to the challenge if customers asked for custom products with different technologies, including Arm.
Like Nvidia’s PC chips, Arm-based processors could be sold as soon as 2025, sources familiar with the matter said.
