Intel Nears $1.6 Billion Deal for AI Chip Firm SambaNova
Intel Corp. is in advanced discussions to acquire artificial intelligence chip startup SambaNova Systems Inc. for about $1.6 billion, including debt. According to people familiar with the matter, the negotiations have progressed significantly. As a result, a deal could be finalized as soon as next month. However, the people requested anonymity because the information remains confidential.
While talks have moved forward, the terms and timing could still change. Moreover, SambaNova has signed term sheets with other potential financial investors. Therefore, the startup could choose an alternative path if conditions shift.
SambaNova’s Background and Strategic Fit
SambaNova is based in Palo Alto, California, and was founded in 2017 by Stanford University professors. Notably, one of the founders is a recipient of a MacArthur Genius Award. The company designs custom AI chips and aims to compete with offerings from Nvidia Corp. Consequently, it has positioned itself as a challenger in the fast-growing AI hardware market.
Intel Chief Executive Officer Lip-Bu Tan serves as chairman of SambaNova. In addition, his venture capital firm, Walden International, was among the founding investors. It led a $56 million Series A funding round in 2018, which helped establish the company’s early momentum.
Valuation Context and Market Reaction
At a reported price of $1.6 billion, the acquisition would provide Intel with a long-sought platform to expand its AI product portfolio. Importantly, the deal would come at a significant discount. SambaNova was valued at $5 billion in 2021 during a $676 million funding round led by SoftBank Group Corp.’s Vision Fund 2.
Meanwhile, Intel’s stock has surged since the US government announced plans in August to take a 10% stake in the chipmaker. Since then, shares have gained about 60%. However, the stock fell 4.3% to $37.81 in Friday trading in New York. As a result, the company’s market value stands at roughly $180 billion.
