Nvidia Stock Inches Higher As It Moves To Challenge Intel PC Chips

The NVIDIA Corp (NASDAQ: NVDA) stock price inched higher after news reports emerged that the chip manufacturer, a dominant player in the AI and data centre sectors, was making a strategic move to challenge Intel’s dominance in the PC market.

Reports reveal that Nvidia has discreetly embarked on the design of central processing units (CPUs) capable of running Microsoft's Windows operating system, using technology from Arm Holdings. This development is part of Microsoft's initiative to assist chip manufacturers in creating Arm-based processors for Windows PCs.

Microsoft's ambition in this domain takes a direct shot at Apple, which has significantly expanded its market share since introducing its own Arm-based chips for Mac computers, according to preliminary third-quarter data from research firm IDC.

In addition to Nvidia, Advanced Micro Devices (AMD) is also gearing up to manufacture chips for PCs employing Arm technology, potentially making these chips available as early as 2025. This strategic shift by Nvidia and AMD could significantly disrupt the PC industry, which Intel has long dominated.

The move responds to increasing pressure from Apple, whose custom chips have given Mac computers enhanced battery life and competitive performance, rivalling traditional high-energy chips. Microsoft, impressed by the efficiency of Apple's Arm-based chips, particularly in AI processing, aims to achieve similar performance standards.

Microsoft's journey into Arm-based processors dates back to 2016 when it selected Qualcomm to spearhead the effort of transitioning the Windows operating system to the Arm architecture. This architecture, known for powering smartphones and their compact batteries, was embraced as a forward-looking solution. 

Microsoft granted Qualcomm an exclusivity arrangement until 2024 to develop Windows-compatible chips, after which they have encouraged other chip manufacturers to enter the market.

The rationale behind this approach is to prevent dependence on a single vendor, following the lessons learned in the 1990s when Microsoft was heavily reliant on Intel. As a result, a diverse ecosystem of chip suppliers is viewed as a strategic advantage.

Moreover, Microsoft has been actively promoting the integration of advanced AI capabilities into the CPUs being designed by these chipmakers. Their vision includes AI-enhanced software, such as Copilot, becoming integral to using Windows. 

Nvidia stock price. 

Nvidia stock price was trading up 1.91% at $437.95 from Monday’s closing price of $429.75.