Intel Nears $1.6 Billion Deal for AI Chip Startup SambaNova

Intel Corp. is reportedly in late-stage negotiations to buy artificial intelligence chip startup SambaNova Systems Inc. for roughly $1.6 billion, including debt, according to people familiar with the discussions.

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The sources said a transaction involving the Palo Alto, California–based company could be finalized as early as next month. They requested anonymity because the talks are private and not yet finalized.

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Even though negotiations are said to be well advanced, there is no certainty a deal will be completed. The people cautioned that pricing, structure, and timing remain subject to change. They also noted that SambaNova has signed term sheets with other potential financial backers, meaning the startup could still decide to pursue alternative funding or strategic options.

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Both Intel and SambaNova declined to comment on the reported discussions.

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SambaNova was founded in 2017 by professors from Stanford University, including one recipient of a MacArthur “Genius” grant. The company focuses on designing custom artificial intelligence processors and systems, positioning itself as a challenger to Nvidia’s dominant AI chip lineup.

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The potential acquisition carries notable ties between the two companies. Intel Chief Executive Officer Lip-Bu Tan currently serves as chairman of SambaNova. In addition, Tan’s venture capital firm, Walden International, was an early backer of the startup and led its $56 million Series A funding round in 2018.

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At an estimated price of $1.6 billion, acquiring SambaNova would give Intel a ready-made AI hardware platform at a steep discount compared with the startup’s prior valuation. In 2021, SambaNova was valued at $5 billion during a $676 million fundraising round led by SoftBank Group’s Vision Fund 2, reflecting the peak of investor enthusiasm for AI-focused semiconductor companies.

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For Intel, the deal could represent a meaningful step toward strengthening its artificial intelligence portfolio at a time when competition in the sector is intensifying. The company has long sought to expand its presence in AI chips and related infrastructure, an area where rivals such as Nvidia have surged ahead amid explosive demand from data centers and enterprise customers.

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The talks come against the backdrop of a strong rally in Intel shares. The stock has climbed roughly 60% since before August, when the US government announced it would acquire a 10% stake in the chipmaker as part of broader efforts to bolster domestic semiconductor production. That support helped reignite investor confidence after years of operational and competitive challenges.

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Despite the broader rally, Intel shares pulled back on Friday, sliding 4.3% to close at $37.81 in New York trading. The decline left the company with a market capitalization of approximately $180 billion.

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If completed, the acquisition of SambaNova would underscore Intel’s renewed push to regain relevance in the fast-moving AI chip market. It would also highlight how valuations across the sector have reset since their 2021 highs, creating opportunities for well-capitalized buyers to secure advanced technology assets at more attractive prices.

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