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Cisco unveils AI-focused chip to link massive data centers

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Cisco Systems has introduced a new networking chip, the P200, designed to connect large-scale AI data centers across vast distances. The technology, which will power a new generation of high-capacity routers, has already attracted major clients including Microsoft Azure and Alibaba Cloud, the company announced Wednesday.

The P200 aims to solve a growing challenge in artificial intelligence — connecting geographically distant data centers so they can operate as one massive computing system. “AI training jobs are now so large, they require multiple data centers working together — even a thousand miles apart,” said Martin Lund, Cisco’s executive vice president of common hardware.

The chip consolidates what previously required 92 separate components into one, allowing routers to use 65% less power. Cisco said the innovation helps AI firms manage rising energy demands as data centers spread to regions such as Texas and Louisiana, where electricity is more abundant.

The P200 will compete directly with Broadcom’s networking chips, offering faster data synchronization and more efficient buffering technology, a crucial feature for ensuring AI workloads remain stable across distributed systems.

Industry leaders including Microsoft’s Dave Maltz praised the move, saying the chip provides “faster networks with more buffering to absorb bursts of data,” critical for scaling AI operations. Cisco did not disclose investment costs or revenue expectations but said the chip represents a major leap in AI infrastructure efficiency.

Nvidia to invest up to $100B in OpenAI, fueling AI dominance — and antitrust worries

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Nvidia will invest up to $100 billion in OpenAI and supply it with advanced data center chips, the companies confirmed Monday, marking one of the largest-ever deals in artificial intelligence. The pact ties together the world’s leading AI chipmaker and the sector’s most high-profile model developer, deepening concerns about market concentration.

Deal structure

  • Nvidia will acquire non-voting shares in OpenAI.

  • OpenAI will use the cash to purchase Nvidia chips, creating what analysts called a “circular” arrangement.

  • The two companies signed a letter of intent to deploy at least 10 gigawatts of Nvidia systems — equivalent to powering 8 million U.S. homes.

  • Nvidia will begin deliveries in late 2026 via its new Vera Rubin platform, starting with 1 GW of compute.

  • Initial investment: $10B, with further tranches scaling toward $100B.

OpenAI CEO Sam Altman said: “Compute infrastructure will be the basis for the economy of the future, and we will utilize what we’re building with Nvidia to both create new AI breakthroughs and empower people and businesses with them at scale.”

Market reaction

  • Nvidia shares hit a record intraday high (+4.4%).

  • Oracle gained 6% amid its own collaboration with OpenAI, Microsoft, and SoftBank on the $500B Stargate data center project.

  • Broadcom fell 0.8% on concerns the deal could complicate its custom-chip work with OpenAI.

Industry context

The pact follows:

  • Microsoft’s multibillion-dollar investments in OpenAI since 2019.

  • Nvidia’s $5B investment in Intel and its $6.6B backing of OpenAI in 2024.

  • Ongoing OpenAI efforts to design its own AI chips with Broadcom and TSMC, which reportedly remain unchanged.

Antitrust spotlight

The DOJ and FTC reached an agreement in 2024 enabling potential probes into the roles of Microsoft, Nvidia, and OpenAI in AI. Analysts warn this deal could intensify scrutiny:

  • Andre Barlow, antitrust lawyer: “It could potentially lock in Nvidia’s chip monopoly with OpenAI’s software lead, making it more difficult for rivals like AMD or competing AI labs to scale.”

  • Stacy Rasgon (Bernstein): The structure raises concerns about Nvidia’s investment dollars coming back as chip purchases.

The Trump administration has so far taken a lighter regulatory approach than Biden’s, emphasizing growth over enforcement — though officials say protecting competition in AI infrastructure remains a long-term priority.

Nvidia takes $5B stake in Intel, forging alliance on future AI chips

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Nvidia announced a $5 billion investment in Intel, acquiring roughly 4% of the struggling chipmaker and pledging to jointly develop new chips for PCs and data centers. The deal comes just weeks after the U.S. government took an extraordinary 10% stake in Intel to shore up the company amid mounting concerns about its competitiveness.

Intel shares surged 23% on the news, while Nvidia’s stock rose nearly 4%. Nvidia will pay $23.28 per share, slightly below Intel’s prior closing price but above what Washington paid earlier this month. The investment makes Nvidia one of Intel’s largest shareholders and marks a pivotal moment in the U.S. effort to counterbalance Asia’s dominance in chip production.

Under the pact, Intel will supply central processors and advanced packaging for joint products that combine Intel CPUs with Nvidia GPUs, linked by Nvidia’s high-speed proprietary technology. The companies pledged to build “multiple generations” of such products, though Nvidia stopped short of committing to use Intel’s foundries for its own chips—a key issue for Intel’s turnaround.

The partnership could reshape the competitive landscape. Analysts say it poses the most immediate risk to AMD, which competes with Intel in supplying data center CPUs, and a longer-term threat to TSMC, which currently manufactures Nvidia’s flagship processors. Broadcom, whose chip-to-chip interconnect technology underpins many AI systems, may also feel pressure.

“This is a massive game-changer for Intel and effectively resets its position of AI-laggard into a cog in future AI infrastructure,” said Gadjo Sevilla, senior analyst at eMarketer. Some analysts even speculate the deal could be the first step toward an eventual breakup or acquisition of Intel by U.S. chipmakers.

Intel’s new CEO, Lip-Bu Tan, has vowed to streamline operations and build capacity more cautiously, only when demand is clear. Nvidia CEO Jensen Huang emphasized the administration was not directly involved in the partnership but noted Washington would welcome the collaboration.

For Intel, the deal adds to a growing cash reserve after a $2 billion investment from SoftBank and $5.7 billion from the U.S. government. For Nvidia, the alliance gives it a foothold in Intel’s deep enterprise and government networks, while cementing its dominance in AI infrastructure.