Intel’s market capitalization has fallen from about $198 billion in early 2024 to about $87 billion today, making the company an interesting acquisition target. Broadcom is certainly one of the companies known for making big acquisitions, and given its current focus on custom data center processors for artificial intelligence, it might be interested. However, its chief executive downplayed the possibility, citing Intel’s lack of interest.
“[Broadcom has] not asked [to take over Intel]”, Broadcom CEO Hock Tan said in an interview with the Wall Street Journal. financial times. “I can only do a deal if it’s feasible. Feasible means someone comes to me and asks me. One thing I’ve learned since Qualcomm: There are no hostile offers.”
As early as 2018, Broadcom attempted to acquire rival chipmaker Qualcomm in a $142 billion hostile takeover. Stopped by then-President Trump This is a rare and extraordinary move.
Earlier this year, we reported that Qualcomm might be interested in acquiring Intel, although other reports ultimately turned out to be true. Company loses interest in acquiring Intel and all of its product divisions and manufacturing operations.
Just like the merger with Qualcomm, the merger of Intel and Broadcom can also be in line with industry trends. Broadcom has seen growing demand for the artificial intelligence processors it designs for customers such as Google and data center connectivity solutions. In contrast, Intel’s processors power the vast majority of server and client PCs. Broadcom lacks a PC business and does not provide server CPUs.
Intel’s advantage, of course, is its production scale and dominance of client PCs. However, Intel is currently struggling to keep its process technology competitive with TSMC and its processor products competitive with rival AMD. Therefore, the company is not particularly attractive at the moment, especially since Broadcom is integrating its VMware acquisition. Will reach US$61 billion in 2022.
In addition, Broadcom is busy providing customized processors to major high-tech companies, including ByteDance, Google, Meta, and reportedly Apple and OpenAI, which are looking for alternatives to Nvidia processors.
Tan described an investment frenzy underway in Silicon Valley, where tech giants are rapidly planning AI infrastructure projects for the next three to five years. These companies are building large data centers, such as xAI’s Memphis data center 100,000 Nvidia GPUs Colossus has up to 1 million Nvidia GPUs to meet the computing needs of its ambitious artificial intelligence projects.
Tan predicts that as demand for computing power to train and run advanced AI systems grows, Broadcom customers’ AI projects may require clusters with as many as 1 million processors. He emphasized that while there is uncertainty about when or if artificial general intelligence (AGI) will be achieved, the principle of scaling (more data and processing yields smarter AI) is driving these investments.