Extra! Extra! Nvidia Buys Intel!!!!! Next Stop $5 Trillion!!!!! Well… We Can Dream Can’t We?

With Lina Khan finally out of the Federal Trade Commission, maybe we can have a Commission that actually favors trade.

Crucial to a trade policy that advances American competitiveness is to be strategic about size. In a global market, America will often be better served if the government supports mergers and the resulting heft rather than being suspicious of mere size.

The feds blocked the Jet Blue/Spirit Airlines merger. Now Spirit is bankrupt. How is that helpful to anyone?

Why would we want either Google (GOOG) or Amazon (AMZN) to be broken up? How would smaller be better? The universality of their reach is almost the best thing about them.

Amazon has enabled the launch of more than 2 million small to midsize businesses, and several million more occasional sellers. They flock to Amazon because EVERYONE has an Amazon account. These independents account for 60% of sales on Amazon and more than 60% of Amazon sellers become profitable their first year. That’s down to Amazon being huge.

As for competition, Temu, a Chinese online retailer, is coming at AMZN hard even in the United States. Do we want the American company fighting with one arm tied behind its back?

We bring up this topic though, not merely to support your retail therapy, but because the good Dr. Castellano has come up with a brilliant idea for making one of America’s strongest companies even stronger while restoring the glory days of a fading American Champion.

Robert’s idea is that the Trump administration should make Intel great again by facilitating a merger with Nvidia, now the most important semiconductor firm in the world.

Intel is the source of nearly all Intel’s problems, most of which center on its failures at manufacturing the brilliant chips it still designs. Plus, it was the leading advocate for the horrible CHIPS act, which seeks to bring the blessings of socialism to America’s most dynamic industry. We are almost tempted to say INTC deserves what it gets.

But we won’t.

What we will say is that for all its woes, Intel remains a pile of extremely valuable assets. The company we think is best positioned to turn those assets into profits is run by Jensen Huang.

Nvidia makes most of its money these days supplying superpowered GPUs to mega-scale data centers for AI processing. But as soon as September 2025 (which is, like, this year!!) it will unveil a combined CPU/GPU processor meant to power the PC on your desk and eventually the one on your lap.

The personal computer (PC) market is shifting toward delivering AI at the edge. (In case you are wondering what the edge is, it’s you). AI-powered PCs, both for consumers and enterprises, meet the need to handle AI workloads locally and fast. That is why the dominant producers of PC central processors, AMD and Intel (which still holds more than 75% of the PC GPU market), are incorporating AI capabilities into their machines). Apple and Qualcomm are doing the same.

Just glance at the table below, (which we stole from a recent issue of Gilder Technology Report wherein we  analyze these markets for investors) to get a sense of how fast AI in your PC is coming on.

What that table really represents is how AI-enabled PCs across industries and consumer markets offer transformative opportunity for companies like… Nvidia.

Except there are no other companies like Nvidia.

Nvidia’s potential in this space is enriched by its relationship with ARM, which brings a competitive edge in designing efficient, AI-optimized inference processors. Renowned for their power efficiency and scalability, ARM processors are critical for edge AI applications. Nvidia’s ability to combine ARM-based CPUs with its world-leading GPUs and AI accelerators creates unparalleled potential for AI-PCs. Meanwhile ARM, whose designs utterly dominate the mobile phone market, is determined to gain market share in PCs.

Adding Intel into the mix could advance both Nvidia’s and ARM’s goals and supercharge the AI PC sector.

Currently, the PC market is still dominated by industry standard x86 central processors, which Intel invented hundreds of years ago (1978). It still retains many advantages for general purpose processing. Acquiring INTC and its x86 prowess—and market penetration–would position Nvidia as a vertically integrated semiconductor giant. It would combine Intel’s manufacturing capabilities (still considerable despite hiccups) with Nvidia’s unparalleled expertise in GPUs and AI accelerators. Nvidia+Intel could reign from the (data) center to the edge.

Regulators abroad—which in a global market can veto U.S. mergers–would loathe the idea of this merger. U.S. regulators, however, should welcome it and put maximum pressure on their overseas colleagues to let it happen. Here’s why.

Just as the fed’s veto of the Jet Blue/Spirit merger looks like it’s going to result in one less airline anyway, Nvidia bids fair to dominate PCs eventually, merger or not. Why toss Intel on the trash heap of history trying to stop that likely outcome? Why devalue all those assets? Why not allow one great U.S. company to rule when nearly all the competition that matters is coming from outside the United States.

Traditional protectionism is a disaster; so are industrial policy subsidies like the CHIPS Act. The best thing the U.S. government can do for U.S. industry is to get out of the way if business leaders as smart as Jensen Huang conclude a merger is the way to go.

Above all, in a global economy, our bureaucrats need to accept that Big is okay if it’s Big and American.

P.S. I will be holding a special subscribers-only teleconference on Jan. 15 at 2 p.m. EST entitled “The Evolution of Artificial Intelligence (AI).” The event is free, but you have to register here to be able to attend. Don’t miss out!