It’s been almost 30 years since Microsoft invested in Apple. At the time, Apple was facing a very uncertain future. Today, it’s Intel that is facing an uncertain future. The USA government has purchased a 10% stake in Intel, Nvidia has invested in a 4% stake and SoftBank has invested USD$2B. And now, we learn that Intel has approached Apple, looking for a further injection.
Apple and Intel were not direct market rivals until Apple shifted the Mac to Apple Silicon. Apple also purchased Intel’s modem business and its associated intellectual property in 2019. That investment delivered the C1 and C1X modems found in the iPhone 16e and iPhone Air.
Intel’s approach to Apple is not just about money. Intel’s CPUs have powered the vast majority of PCs sold for the last four decades. But they are no longer the guaranteed cash cows they once were. Apple’s shift to Apple Silicon and rise of AI have hurt Intel’s reputation.
Nvidia dominates the GPU market which is critical for Ai and cryptography. And Intel missed the mobile device revolution. Its focus on PCs and servers took it from being a dominant market force to a commodity chip maker.
Why would Apple entertain this approach?
The simple answer to this is the volatile global political environment.
The USA faces another three years of the Trump presidency’s focus on bringing manufacturing jobs, particularly high tech jobs, back onshore. Apple has committed USD$600 billion to American manufacturing through investments in Corning and a Manufacturing Academy in Detroit.
Intel has been a jewel in the American business crown. But the jewel has lost its lustre. The investments Intel has received are not just about money. The agreement with Nvidia is about collaboration and putting Intel’s CPUs into systems alongside Nvidia’s GPUs.
Apple faces a challenge. While it remains an American company, almost all its manufacturing capability is in Asia. While the focus is often on entire products like the iPhone or Mac, the chips inside those devices are made in foundries and facilities in Asia as well.
Intel says that over the last five years, it has invested almost USD$200B towards expanding its U.S.-based manufacturing capacity and process technology. If Apple can establish a partnership with Intel that results in some manufacturing moved to the USA, it could placate President Trump’s fervour for on-shore manufacturing and minimise the impact of tariffs.
Apple retains a substantial cash holding so an investment in Intel of the same magnitude as Nvidia of the US government would not massively impact the company’s bottom line. Such an investment could be a relatively cheap way to maintain good relations with the government and enable it further diversify its manufacturing base.
Anthony is the founder of Australian Apple News. He is a long-time Apple user and former editor of Australian Macworld. He has contributed to many technology magazines and newspapers as well as appearing regularly on radio and occasionally on TV.