Last week, the battle over chips, and ensuing flip flops, emerged on several fronts. Global chip-maker, Nvidia, invested $5 billion in the stock of Intel, a fierce competitor. The two unveiled a plan to co-develop data-centre and personal computer (PC) platforms. China shut out Nvidia’s accelerators from the former’s largest Internet companies. Huawei, a Chinese major, announced an aggressive roadmap for its Ascend AI hardware and mega-scale clusters. The rules of the game changed.
Today, the story is no longer about one company competing with another one in a race to develop a chip with the maximum computing power. It is about partnerships between competitors, national strategies, especially by the US and China, to maintain dominance and supremacy, and the development of futuristic systems that can deliver the most computing per dollar and per watt.
Hence, the Nvidia-Intel deal is positioned not just as a business arrangement but a reshaping of the computing stack. “AI is powering a new industrial revolution, and reinventing every layer of the computing stack, from silicon to systems to software,” said Jensen Huang, Nvidia’s CEO. He added: “This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem, a fusion of two world-class platforms. Together, we will expand our ecosystems
and lay the foundation for the next era of computing.”
Intel CEO Lip-Bu Tan explained, “Intel’s x86 architecture has been foundational to modern computing for decades, and we are innovating across our portfolio to enable the workloads of the future. Our process technology, manufacturing and advanced packaging capabilities will complement Nvidia’s AI and accelerated computing leadership to enable new breakthroughs for the industry.” Investors caught on, and Intel’s stock soared more than 23 per cent on the day of the announcement, which was its largest single-day jump in years. Nvidia gained nearly four per cent. More importantly, this new deal upgrades Intel from being a laggard in the recent past to a partner with the world-conqueror, Nvidia. The latter now has a hedge against the growing risk of a closing Chinese market.
A day prior to the Intel deal, the Chinese regulators asked its major tech platforms to halt the purchases of Nvidia’s AI chips, including a specific China-only RTX Pro 6000D that Nvidia developed to comply with the US rules. Stepping into this chip vacuum, Huawei offered a solution. Rotating chairman Eric Xu said, “We will follow a one-year release cycle, and double compute with each release.” The company’s Ascend 950 chips will come with in-house high-bandwidth memory in 2026, and the roadmap extends to Ascend 960 and 970 accelerators.
In the past few years, the conversations in the chip world have fixated on single-device performances, and the scarcity premium on top Nvidia parts. These issues still matter, but the debates have shifted, as have the battlefields. At present, one of the crucial concerns among the Governments is related to delivered compute per rack, maturity of interconnects, and guaranteed supplies. The last is especially important in the context of the ongoing tariff tensions, and trade wars (especially between the US and China).
Nvidia and Intel are betting that tight CPU-GPU integration will deliver performance and efficiency leaps for both PCs and data centres. Huawei feels that massive scale, backed by in-house memory and interconnect design, can close the gap. In both cases, the evolving narrative has less to do with having the fastest chip (which was a huge debate in the recent past), and more about which company or nation can deliver resilient systems in volumes.
The differing strategies reflect the deepening fault line between the two major tech blocs. The US firms and their allies are forging partnerships such as Nvidia-Intel, and Microsoft-AMD, along with the American zeal to woo and force local and foreign companies to set up the semiconductor fabrication plants in Arizona and Texas. China is pouring State’s capital into Huawei, Cambricon and others to build a parallel and competing stack of AI compute.
For India, these developments imply risks and opportunities. After the chip shortages that impacted most nations, India has pushed harder to attain self-reliance in semiconductors. Prime Minister Narendra Modi recently declared, “From chip to ship, all must be made in India, it is a necessity now.” The government initiated a $10-billion scheme for fabrication units, packaging and assembly.
The US chip companies have identified India as a key node for assembly, test and design services. If Nvidia and Intel diversify manufacturing and packaging away from China and Taiwan, India may emerge as a viable and lucrative destination. The country’s hyper-scalers and IT giants are watching these shifts. Although building a full-fledged fab ecosystem is a huge challenge, India is positioning itself as part of the supply-chain realignment.
This alignment with the US is an ongoing one, from the times when both nations moved in early and quickly to restrict Huawei’s role in critical networks. New Delhi and Washington worried about security concerns, albeit for different reasons. India barred the Chinese firms, Huawei and ZTE, from the 5G rollouts in 2020. America placed Huawei on its ‘Entity List’ in 2019, which cut off the latter’s access to advanced components. The latest Huawei push into AI chips and superclusters may be viewed in India through the same security-strategic lens. It will imply keeping a rival ecosystem at arm’s length.
For the Indian policy-makers, ties with the American players like Intel and Nvidia are not just about manufacturing, but a reinforcement of a security-technology framework that India has already chosen. In the emerging AI hardware race, this suggests that New Delhi will double down on alliances that fit with its “chip to ship” ambition, and keep the Chinese vendors out.
What is evident is that the world is engaged in an AI race, where systems-thinking ups device-thinking. In simpler terms, the pace is about racks, clusters and integration, not merely silicon specs. As Nvidia, which is at the centre of most chip-related theatrics, hedges its bets against China’s backlash, and Huawei protects itself against in-place overt and covert sanctions, there is no alternative to regionalisation. The potential buyers and users, as well as future manufacturers, across Asia and Europe will aim to insert themselves steadfastly into the new emerging computing maps.
Competition will shift from marketing slides to deployment. Nvidia-plus-Intel will need to prove that close coupling unlocks new efficiency. Huawei will need to show that scale makes up for other constraints. If the Intel-Nvidia designs prove to be a hit, AI PCs may finally become a mass category, and data centres may see lower-latency, lower-power infrastructure. If Huawei’s superclusters deliver, China will show that scale can compensate for sanctions.
