Intel Corporation (INTC.US) is close to acquiring the AI chip startup company SambaNova for nearly $1.6 billion.

Insiders revealed that Intel Corporation (INTC.US) is in advanced negotiations to acquire the artificial intelligence chip startup SambaNova Systems for approximately $1.6 billion (including debt). According to sources, the acquisition of this California-based company in Palo Alto could be reached as soon as next month. They stated that while the negotiations are in the final stages, specific terms and timing could still change. They also added that SambaNova has signed investment letters of intent with other potential financial investors, who may choose other financing options. Representatives from Intel Corporation and SambaNova Systems have both declined to comment. SambaNova Systems was founded in 2017 by a Stanford University professor, one of whom has received the MacArthur Genius Award. The company designs customized AI chips to compete with those offered by NVIDIA Corporation. Intel Corporation CEO David Liwu Chen serves as the chairman of SambaNova Systems. His venture capital firm, Walden International, is one of the founding investors of the company and led a Series A financing round of $56 million in 2018. Acquiring SambaNova for $1.6 billion would provide Intel Corporation with a platform it has long sought to help build its AI product line, and at a discounted price. SambaNova's valuation reached $5 billion in a $676 million financing round led by SoftBank Vision Fund 2 in 2021. Intel Corporation's stock price has been soaring since the U.S. government announced in August that it would hold a 10% stake in the chip maker. The stock has risen by about 60% since the announcement, dropping 4.3% to $37.81 in New York trading last Friday, with a market value of $180 billion. Earlier this month, Intel Corporation halted its plans to spin off its networking division, stating that after evaluation, it had decided not to spin off or sell shares of its networking division, which would be more likely to succeed as an internal business unit. This plan adjustment also reflects the evolving transformation strategy of Intel Corporation CEO David Liwu Chen since taking office in March. During his tenure, he has focused on optimizing operations through layoffs and divesting non-core businesses. A company spokesperson added that as part of this strategic adjustment, Intel Corporation has terminated discussions with Telefonaktiebolaget LM Ericsson Sponsored ADR Class B, with whom they had previously explored the possibility of Telefonaktiebolaget LM Ericsson Sponsored ADR Class B acquiring a stake in NEX. Earlier this year, Intel Corporation had disclosed plans to spin off its networking division and was looking for strategic investors.