Recent Developments in Intel and Apple

Intel has reportedly been in talks with Apple to secure an investment, according to people familiar with the matter. The discussions also involve how the two companies can work more closely together, although it’s noted that these talks are at an early stage and may not lead to an agreement.

Impact on Intel’s Shares

Following the news, Intel’s shares saw a 6% increase. Intel itself has refused to comment on the matter, while Apple has not immediately responded to requests for comments.

Background on Intel’s Investments

This development comes after Nvidia announced a $5 billion investment in Intel for a share of around 4%. The partnership between Nvidia and Intel involves a plan to develop PC and data center chips together, although it does not include Intel’s contract manufacturing business for Nvidia.

Intel’s Turnaround Efforts

Intel’s CEO, Lip-Bu Tan, has been employing partners as part of the company’s turnaround efforts. Intel is trying to compete in the booming AI race, where it has been trailing behind companies like Nvidia and Advanced Micro Devices.

Recent Investments in Intel

Nvidia’s investment in Intel was made just a few weeks after the White House completed an agreement for the federal government to take a 10% stake in the company. This agreement would provide Intel with around $10 billion for the construction or expansion of factories in the USA. Additionally, Intel received a $2 billion investment from Softbank Group last month.

Importance of Partnerships for Intel

The emergence of these lucrative partnerships and the investment from outside customers underscore the importance of Intel’s factories for the future. According to reports, Intel has also been in talks with other companies about possible investments and partnerships.

Potential Apple Investment

A reported investment from Apple would be another significant vote of trust in Intel. Apple had been a long-time Intel customer before moving to use its own custom-specific silicon chips in 2020. For Apple, such an investment would allow it to diversify its base of chip suppliers, which would be particularly valuable if geopolitical risks in Taiwan were to deteriorate due to China’s role in the region.

Benefits for Apple

Investing in Intel would also help Apple improve its relationship with the US government by demonstrating its commitment to investing in the USA. While a significant part of Apple’s supply chain remains international, the company has committed to spending around $600 billion on domestic initiatives over the next four years.