Intel Corp. is closing in on acquiring artificial intelligence (AI) chip startup SambaNova Systems for approximately $1.6 billion, according to reports citing people familiar with the negotiations.
The companies have signed a nonbinding term sheet, including debt, though final regulatory approval and due diligence could take weeks or months to complete, Wired reported Monday.
The potential deal represents a significant strategic shift for Intel as it struggles to compete in the rapidly expanding AI hardware market. SambaNova offers a potential shortcut to competitive AI technology without years of internal development.
While Intel has long dominated traditional computing with its central processing units, rivals like NVIDIA Corp. have captured the lion’s share of the AI chip sector, which has become critical for training and deploying large language models (LLMs) and other machine learning applications.
Founded in 2017 by Stanford University researchers, SambaNova develops specialized AI processors called Reconfigurable Dataflow Units. The chips are designed to accelerate AI operations through dataflow-based computation rather than conventional instruction processing, offering improved performance and energy efficiency for enterprise machine learning tasks in cloud and data-center environments.
The startup raised substantial funding during the 2021 venture capital boom, reaching a valuation around $5 billion. However, the reported acquisition price suggests SambaNova’s value has declined considerably amid tightening investment conditions and intensifying competition in AI hardware.
Intel CEO Lip-Bu Tan currently serves as executive chairman of SambaNova’s board. Tan’s venture firm, Walden International, was an early investor in the startup.
Intel Capital has also backed SambaNova, as has SoftBank Group, which made a major investment in Intel this year. The interconnected relationships raise questions about potential conflicts of interest, though they may also facilitate smoother integration if the deal closes.
The acquisition comes at a turbulent time for Intel. The semiconductor giant reported a $2.9 billion loss in the second quarter of 2025 and announced plans to cut approximately 15,000 employees, or about 15% of its workforce, while postponing major chip development projects.
The federal government recently took a 10% stake in Intel through an $8.9 billion investment funded primarily through the CHIPS Act, underscoring concerns about America’s semiconductor competitiveness.
