🗞 Nvidia Gives Intel a Lifeline

Happy Sunday!

Here’s what’s on the docket for this week’s newsletter:

• 🤝 Nvidia Gives Intel a Lifeline

• 🔈️ Conference Season Roundup

Let’s dive in!

Featured Story

Nvidia Gives Intel a Lifeline

Semiconductor giant Intel has had a tough go of it over the last decade.

While there are probably many reasons why they’ve lost market share over the years, one contributor has undoubtedly been their continued reliance on deep ultraviolet (DUV) lithography. As Intel stuck with DUV technology, other chip manufacturing firms like Taiwan Semiconductor (TSMC) placed big bets on EUV (Extreme Ultraviolet) lithography, and are now reaping the benefits.

EUV has enabled TSMC to produce more advanced and power-efficient chips for their clients, which has made them the go-to foundry for today’s leading-edge silicon.

In fact, TSMC now has such a lead, that it’s estimated they manufacture ~90% of the world’s most advanced process nodes (7nm, 5nm, 3nm). And it wouldn’t be too far-fetched to say that the current global economy as we know it (and particularly the big tech giants), are extremely dependent on continued access to those leading-edge chips.

That level of supplier concentration and dependence on a single provider (especially one in such a geopolitically tense region of the world) poses a significant risk to a lot of people, including ultimately consumers.

So what do you do?

Well, on Thursday, news came out that Nvidia will be making a $5 billion equity investment in Intel at $23.38/share.

This news came just weeks after the U.S. government themselves announced that it’s taking a 9.9% stake in Intel.

So it appears the answer from Nvidia and the U.S. is to support the most formidable US-based competitor, who at the moment, could use the help.

In a post on Twitter/X, Intel’s CEO Lip-Bu Tan stated “Excited to team up with my good friend Jensen to jointly develop multiple generations of custom data center and PC products!”

As a part of this partnership, Intel will build custom x86 CPUs for Nvidia, which Nvidia will integrate into its AI infrastructure platform. Nvidia’s CEO Jensen Huang said “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.”

Who benefits the most?

This seems to be a big win for all parties involved. The cash infusion and recurring orders should certainly help Intel, especially considering Intel’s net debt has risen from $9 billion to $30 billion over the last 4 years.

But Nvidia should come out of this a winner as well. Not only could this help mitigate some of Nvidia’s reliance on Taiwan Semiconductor, but it also curries favor with the U.S. government, which has been stressing the importance of on-shoring semiconductor manufacturing.

Oh, and one other hidden beneficiary with this deal will likely be ASML. To build these advanced custom-chips, Intel is going to require EUV lithography machines, which only ASML can provide.

Seeing as just one of these machines costs more than $200 million on average, this should ultimately result in some bookings growth for the Dutch lithography giant as well.

Platform Update

Introducing Fiscal News Feed 📰 

This week, the team at Fiscal.ai launched a new and improved News Feed!

No more guessing why your stocks are moving.

With the Fiscal News Feed, you can now instantly discover what's driving a stock's price movement from both the dashboard and the individual company pages.

Featured Story #2

Conference Season Roundup

Last week, Goldman Sachs hosted its annual Communacopia + Technology Conference in San Francisco, where executives from virtually every big tech company came to talk shop. The conference certainly did not disappoint.

Here were some of the most interesting quotes from the executives in attendance:

Alphabet

Thomas Kurian, Google Cloud CEO:

“To give you a sense of the scale, if you compare us to other hyperscalers, we are the only hyperscaler that offers our own systems and our own models. We're not just reselling other people's stuff. The volume of tokens we process is twice other providers in half the time, so roughly four times the volume.”

Airbnb

Brian Chesky, CEO:

“Essentially, what we're seeing is the opportunity to build an entire host ecosystem of services. I think this can manifest in what we might call monetization, right? The way we would charge for this is probably the equivalent of a larger take rate if you use these services. I think promoted listings is really, really interesting. We've looked a lot at this. I don't think it has to be a trade-off between ads and a great user experience. I think with AI, the whole paradigm of an ad has to change.”

Meta Platforms

Eric Sheridan, Analyst:

“Mark made some comments at the White House about spending $600 billion in the U.S. by 2028. How should investors think about that broad framework of what you want to invest?”

Susan Li, CFO:

“Just to clarify, Mark's comments are referring to sort of the total envelope of our planned U.S. investment from this year, including 2025 through 2028. That includes, obviously, all the data center infrastructure that we are building in the United States, but it also just includes all the investments that go towards supporting our U.S. business operations, all the people we hire in the U.S., where our biggest offices are. That's what that is referring to.”

Microsoft

Jared Spataro, CMO:

“We think of it this way. Copilot is to agents like the iPhone is to apps. In other words, just like the iPhone has become a platform or a window into the world of apps over the last decade, we believe that in a commercial sense, Copilot will become a window or a conduit into the world of agents. What we envision happening is Copilot will help you at the right time select the right agents to solve the business problem that's in front of you. That's what our customers are asking for.”

OpenAI

Sarah Friar, CFO:

“It is a wild pace that we’re on. We're defining a whole new era of AI… Revenue this year will grow about 3x. So about $13 billion in revenue from about $4 billion last year. So it's tripling on a very big base as well.”

Match Group

Spencer Rascoff, CEO:

“Hinge is probably the most underappreciated and least focused on success story in consumer tech. If it were a standalone company, I think it would get more visibility… Hinge is on a path to $1 billion of revenue in 2027. It's in the $700 to $750 million revenue range, and it just hit a milestone of 15 million monthly active users. It's already the number one dating app in a couple of countries.”

Visa

Jack Forestell, Chief Product & Strategy Officer:

“Last time I talked about it publicly, we were at a run rate of about $250 million a year in stablecoin settlements. I checked in with the team just the other day. We're at about $1 billion now. In the space of several months, we've quadrupled the amount of volume that we're doing on the stablecoin settlement space.”