Nvidia Corp. unveiled its first microprocessors for servers, to expand its penetration in the most lucrative market for Intel Corp, with chips aimed at dealing with the most complex computing work. Intel shares fell by 4%, and NVIDIA shares jumped on the news.
Nvidia rose, gaining about 6%, after the company said that first-quarter revenue was moving in a higher path than its previous expectations.
The graphics chip maker has designed a central processing unit (CPU), based on technology provided by Arm Limited, the company Japan’s SoftBank Group is seeking to acquire.
The Swiss National Center for Supercomputing and the Los Alamos National Laboratory of the US Department of Energy will be the first users of electronic chips in their computers, according to what Nvidia revealed on Monday in an online event.
Nvidia has focused mainly on graphics processing units (CPUs), which are being used to run video games and intensive computing tasks in data centers. In contrast, CPUs are a type of chip that is more specialized, and can perform basic tasks such as operating operating systems. Expanding in this product category increases the chances of generating higher revenues for NVIDIA.
Founder and CEO Jensen Huang has made Nvidia the most valuable chip maker in the United States, by keeping his promise to give graphics chips a key role in the take-off of cloud computing.
Data center revenues contribute about 40% of the company’s sales, up from less than 7% just five years ago, and Intel still has more than 90% of the market in server processors, each of which can sell for more than $ 10,000.