Intel is in talks to acquire AI start-up SambaNova, known for custom AI chips and rack-scale systems for AI inference workloads. The rumored price tag is $1.6 billion, significantly lower than its previous valuation of $5 billion. This acquisition could accelerate Intel’s AI strategy shift.

Intel’s past AI acquisition of Habana Labs for $2 billion didn’t pan out due to unfamiliar architecture and competition from Nvidia’s GPUs. If Intel acquires SambaNova, focused on AI inference solutions, it could fare better. SambaNova recently secured deals to power AI clouds in Australia, Europe, and the UK.

SambaNova’s focus on rack-scale AI solutions aligns with Intel’s latest AI strategy. Intel aims to develop fully integrated systems for data centers. While Intel has struggled with AI acquisitions in the past, acquiring SambaNova could help gain ground in the AI infrastructure market. The deal’s impact on Intel’s stock remains to be seen.

Read more at Nasdaq: Intel Is Eyeing an AI Acquisition. Its Track Record Isn’t Great.