Intel’s earlier strategy to offer cost-effective alternatives to Nvidia’s GPUs has not worked well; AMD has already captured the fast follower spot. On the other hand, SambaNova has pivoted to inference designs after Nvidia tightened its dominance in chips for training large AI models. The Palo Alto-based startup laid off 77 employees—roughly 15% of its 500-strong workforce—while shifting its focus from training to inference design.

SambaNova is now building systems optimized to run already-trained AI models. These systems are built around SN40L processors, the company’s fourth-generation RDU, which features large local memories to support the performance required to run AI models.

As part of the system, the company offers SambaRack, built around multiple modules featuring 16 SN40L RDUs. Then there is SambaCloud, built around the SN40L RDU chips to support a range of inference models like DeepSeek, Llama and Qwen. Finally, SambaManaged, a fully managed inference cloud, can be built in a customer’s data center infrastructure.

So, with SambaNova, Intel could gain a developer of chips, systems and clouds, all aimed at AI inference, which is now the centerpiece of Intel’s AI roadmap.

Intel’s ties with SambaNova

Another notable part of this deal, which is reportedly still in the works, is Intel CEO Lip-Bu Tan’s prior ties to SambaNova, which some industry observers are equating to a conflict of interest. Walden International, the venture capital firm where Tan serves as Executive Chairman, was one of SambaNova’s founding investors, leading a $56 million Series A funding in 2018.

SambaNova’s ties with the chipmaker do not end there. Intel Capital is also an investor in SambaNova. Next, SoftBank, an investor in Intel, provided $676 million in funding to SambaNova in 2021 through its Vision Fund. Other SambaNova investors include BlackRock, SK Telecom, Micron’s Intelligence Accelerated and Samsung Catalyst Fund.

The deal also marks an about-face for Intel’s strategy of not making acquisitions in the near term, as the company’s CFO, David Zinsner, stated in April this year. However, this strategy came under question soon after Tan was appointed Intel CEO.

“Our goal will be to take an integrated system and platform view to develop full-stack AI solutions that enable more accuracy, power efficiency,” Tan said soon after taking charge at Intel. “Our goal will be to enable the next wave of computing defined by reasoning models, agentic AI and physical AI.”

That clearly shows that Tan was eyeing his next move in AI soon after he took the top job at Intel. And SambaNova is an AI outfit that both the Intel CEO and the company’s investment arm, Intel Capital, know pretty well. It also tells a lot about Intel’s next AI move.

New acquisition playbook?

So far, SambaNova has raised $1.14 billion in funding, and according to PitchBook, it had a valuation of $5.1 billion in 2021. However, according to the Bloomberg report, any deal would likely value SambaNova at below the $5 billion it fetched in a 2021 funding round.

The report also states that deliberations are in the early stages and there is no certainty that the companies will reach an agreement. Both Intel and SambaNova have declined to comment on this news. Nevertheless, if this deal pushes through, it will provide a glimpse of Intel’s AI hardware roadmap.

Another important thing to watch will be how Intel executes this acquisition and creates value for its product roadmap. Intel’s track record of acquisitions is not very impressive. Will that change under Tan’s watch? Industry watchers reckon that Tan’s expertise in dealmaking, venture capital and startups will help Intel turn the page on the acquisitions front, as well.

By: DocMemory
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