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Nvidia Moves In on Intel's Turf With Server Microprocessors

Nvidia shares rise on word of its first server microprocessor, while rival Intel slides on the report.
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Nvidia  (NVDA) - Get NVIDIA Corporation Report said Monday that it is offering its first server microprocessors, a move that will further heat up the chipmaker's rivalry with Intel  (INTC) - Get Intel Corporation Report.

At last check shares of Nvidia were up 3.7% to $597.42, while Intel dropped 4.8% to $64.96. Both are based in Santa Clara, Calif.

Nvdia said it will release its Grace server processor in 2023. It is designed to handle tasks like training artificial intelligence algorithms.

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In a speech announcing the chip, Nvidia Chief Executive Jensen Huang called the new server chip the "final piece of the puzzle" that will join Nvidia's graphics and networking chips to form the "basic building block of the modern data center," Reuters reported.

The company said the Swiss National Supercomputing Centre will make a new supercomputer, dubbed Alps, built by Hewlett Packard Enterprise  (HPE) - Get Hewlett Packard Enterprise Co. Report and using the new Grace processors.

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The chip is based based on technology from the United Kingdom's Arm Ltd.  In September, Nvdia said it had reached a deal to acquire Arm from Softbank for $40 billion.

Arm's technology goes into chips powering billions of devices shipping each year - everything from smartphones to video cameras to hard drives to washing machines.

Federal regulators opened an investigation into the acquisition in February.

A consortium made up of Alphabet's  (GOOGL) - Get Alphabet Inc. Class A Report Google, Microsoft  (MSFT) - Get Microsoft Corporation Report and Qualcomm  (QCOM) - Get Qualcomm Inc Report, among others, had asked antitrust officials to intervene in the sale.

In February, Nvidia reported fiscal-fourth-quarter results that topped analyst estimates for both earnings and revenue.

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