Here's a plot twist in the great AI chip war: Intel Corp. (INTC) CEO Lip-Bu Tan isn't just trying to beat Nvidia Corp. (NVDA) with Intel's own tech. He's also betting big on an outside horse—an AI chip startup called SambaNova where he happens to be the chairman.
Tan, who first invested in SambaNova eight years ago, is now overseeing Intel's participation in a fresh $350 million funding round for the startup. More importantly, the two companies announced a new multi-year collaboration where SambaNova will adopt Intel's server processors and graphics cards. Think of it as Intel providing the foundation while SambaNova builds specialized AI accelerators on top.
This is a classic "if you can't beat 'em, join 'em (and fund 'em)" strategy. Nvidia's GPUs have so thoroughly dominated the market for running generative AI models that they propelled the company to a $4.5 trillion market cap last October. Intel, meanwhile, has been playing catch-up, developing its own graphics card while also seeking partnerships to stay relevant. Tan mentioned the in-house GPU effort earlier this month, but this SambaNova deal suggests a parallel, potentially faster path.
The partnership comes with some interesting backstory. According to reports, Intel previously explored outright acquiring SambaNova for about $1.6 billion, but those talks didn't pan out. So instead of buying the company, Intel is investing and partnering with it. Sometimes the second-best option is just to become their biggest ally.
So what does SambaNova bring to the table? The startup is touting its new SN50 chip, which it claims delivers higher performance than Nvidia's B200 GPUs based on the Blackwell architecture. The pitch is simple: more computing power for the same price. And they already have a marquee customer lined up to test that claim: SoftBank (SFTBY), which is both an investor in OpenAI and an existing SambaNova client, plans to deploy the SN50.
All this activity is happening against a backdrop of wild optimism—and some skepticism—in the chip sector. Intel's stock has climbed an impressive 80% over the past year, buoyed by U.S. government support and even an investment from Nvidia itself. But analysts are still preaching caution.
DA Davidson analyst Gil Luria recently initiated coverage on Intel with a Neutral rating and a $45 price target. He acknowledged the operational progress fueling the rally but described Intel as a "show me" story. In other words, investors want to see more concrete, sustained evidence of a turnaround before fully buying in.
The entire sector, however, is getting a tailwind from jaw-dropping spending plans announced by tech giants. Alphabet Inc. (GOOGL) raised its capital expenditure outlook to a range of $175 billion to $185 billion. Amazon.com Inc. (AMZN) projected a whopping $200 billion in capex. Wedbush analyst Dan Ives expects Big Tech spending to reach $550–$600 billion in 2026, up from about $380 billion in 2025.
The Semiconductor Industry Association reported global chip sales hit $791.7 billion in 2025. It's forecasting 26% growth for 2026, which would put the industry on pace to approach $1 trillion in annual revenue. That's the kind of market size that makes even challenging a dominant player like Nvidia worth a serious shot.
For Intel and Tan, the SambaNova partnership is a strategic chess move. It's a way to leverage external innovation, secure a partner for its own hardware, and plant a flag in the ground against Nvidia—all without having to build everything from scratch. Whether it's enough to actually shift the balance of power in the AI hardware race is the billion-dollar (or trillion-dollar) question. But in a market growing this fast, having multiple irons in the fire is probably a smart bet.
