Will kill intel even faster, all other PC vendors will abandon it right away and there are anti-trust laws and racketeering laws.

Intel had a choice between Moore’s law and x86. It wrongly picked x86 , maybe to please the board. It is irreparably damaged, the barbarians are in the building. It has one shot to redemption and Microsoft designing its own has opened this marriage for infidelity, i.e. acquisitions of the Vmware kind. But the question is what can it do to compete with Nvidia and all the fabless designers who will flood with market with chips.

I lead the audit to assess Alpha in 1997 now under foundry responsibility of Samsung Semiconductor on acquisition from Compaq and all 400 participants involved in that 3 month audit supported continuation on examples of traction everywhere. All Samsung had to do was produce Alpha in volume in relation Drake, Tanner, Cascades and yes Cascades refers too “crush”. Unfortunately, Intel had already infiltrated Samsung Semiconductor on North 1st Street in San Jose through former employees aimed to put Alpha to bed, for Intel, parallel Ziff Davis engaged in systematic mass market destruction of Alpha through Ziff Davis lackey system integrator named Enorex. Samsung is not repeating that error on Ampere. mb

If AMD and some ARM server/client vendors have competitive products to Intel and they treat the customers better ( no insider deals for Dell because they are a larger stockholder), then lower costs for Dell probably won’t help Intel overall stakeholders. Pretty likely even more customers will leave and “lower margin” Dell will represent an even larger share of the customer base.

That would good move to put more money in Micheal Dell’s pocket. Probably wouldn’t do much for the rest of Intel stockholders ( or employees long term) .

Even if Intel claws its way back into a position were not getting steady market share losses due to some major tech development leadership gap it is still unlikely to get back to the 2010’s status where vendors had to go on bended knee to grovel and beg favor of Intel. At best Intel can stop the “bleed” but are unlikely to recover all of the losses over the next 2-4 years.
( barring AMD and/or major ARM vendors majorly shooting themselves in the foot. More than one competitor means it is less likely that all of them stumble and fall flat so that Intel can easily just walk over them all. )

> What’s that worth to Dell to get better pricing from Intel than their rivals?

Dell doesn’t control Intel’s treasury. If Dell too their VMWare IPO money and plowed it into buy Intel share’s would that be a good way to get deeper disscounts? Probably not. Dell did sink gobs of money into buying Intel shares before and going forwarly likely isn’t any different.

Going the other way ( Intel dumping money into Dell’s pockets) doesn’t do a whole lot for Intel either. Trying to ‘buy’ captive customers usually doesn’t work well. Intel already tried that with the previous 3rd party foundry business with rather weak overall results. Another example, spending tons of money to buy Atom placement in very high mobility platforms didn’t work out for Intel in the long term either.

Dell ending up being a major stockholder is more about billionaire/”large company” personality status and that story’s “theme” of legacy players with the same name , than something substantive to Intel’s long term strategic interest.

Intel having a single customer as a major stockholder is a similar negative slippery slope as Nvidia owning ARM. That is going to generation blowback that there are special ‘insider’ deals and folks will go looking for other options if available. ( Nvidia is trying to negate that with ‘promises’ that they’ll let ARM operate independently. Unenforceable promises probalby isn’t going to cut it. )

1. Intel is committed to being in the leading edge fab business. Having approximately $8 billion in profit looks like a first class drunken sailor spending spree money right up until realize that a new 2-3nm fab is going to put Intel back about twice that amount ( at least). [ TSMC is spending $100B over next 2-3 years. Samsung another far larger than $8B . Intel continues to stumble they could be in 3rd place in high density , but also high volume business. ] Intel has triple digit Billion capital costs coming up over the next 4-6 years. Intel doesn’t have lots of excess cash with those kind of liabilities on the horizon. ( they will probably still do company acquisitions , just not very large ones. )

Sell off NAND for $9B and drop $10B on EUV fab expansion in AZ .. where is the huge pile of excess cash from that swap? Plus any possible clean up and factoring of the 3D Xpoint (Optane) business to something to better long term growth path ( less proprietary and broader industry competitive pressures to make it more resilent. Using Optane as a cash cow , higher margin crutch has worked for now, but going forward it highly likely won’t be as effective. ). Intel is *WAY* behind on capital spend on EUV fabrication infrastructure if they want to be a large volume player. And when you spend the money matters because can’t just arbitrarily buy bleeding edge EUV fab equipment on the spot market. If you don’t have money down on a future production slot. you’re not getting any. If Intel gets the kinks out of their 7nm (5nm) and can’t get equipment to do volume that isn’t going to be maximally productive.

This low synergy, tangent chasing is the same kind of “eye off the ball” strategy that assisted in digging the hole that Intel is in now. ( “We’ve got a 2 year fab process lead on everyone so let’s get distracted with other tangential shiny objects. ” ).
Intel doesn’t have a “how do we spend the extra money off the ‘print money machine’ ” problem anymore. Going forward the competition is steeper and the margins are going to feel some pressure. Grossly over paying for something just because they can is probably in the past for Intel. (at least until they fix some major issues. )

Intel couldn’t make the 3rd foundry business work so threw money at buying up FPGA, MobileEye, AI chips , etc. to herd business into the foundry. Buying VMWare largely smacks of the same mindset. Lacking in very clear ‘win-win’ synergies where would get more than additive impact on long term future revenues. Instead of fixing the core problem ( bad 3rd foundry biz approach), they just threw cash at captive customers to feed the broken biz. Intel needs to fix the core of the house with as much spending as necessary before going off into major acquisitions.

2. VMWare is also in a bit the inflection point zone. Seamlessly migrating VM images over almost completely homogeneous Intel x86-64 data center is easy. VMWare hasn’t really have a deep moat of a successful track record in highly heterogeneous hardware context. Additionally, more data center computational workload disappearing into DPUs (where VMWare isn’t a major player) also contributes to the inflection point. VMWare can make the transition to being multiple platform focused , but they need to build the appearance of being more hardware “neutral” rather than more single vendor focused.

Dell is separating at VMWare at a probably high point ( at least a local max in time) . They are “getting while the getting is good”. That doesn’t mean Intel should buy them ( at some substantive mark-up price).

VMWare has gone from propping up EMC stock price to propping up Dell stock price. Once VMWare gets independent, it is unclear why the stockholders with long term interest would want to jump back into a prop up some other stock duty. VMWare is at the point where more of their profits need to go into staying relevant in the core business they are in while that business goes through a major inflection point VMWare is also in the context going forward where it won’t have loads of “excess” profits to contribute to paying back for gross overspending of the parent company. (e.g., paying back what over paid for. )

Weaning off the VMWare cash cow is a good move for Dell/EMC (and silverlake). Milking a cash cow on a stable market is fine. Milking a cash cow on a shifting market is far more likely to kill the cow ( not a guarantee to kill the cow, but more risky than old status quo).

P.S. if Gelsinger is feeling nostalgic about running a Software company, then Intel has more software folks than AMD has hardware ones. There is a quite large software stack inside of Intel. ( different software than VMWare , but base infrastructure software ). Both the hardware and software stacks need work and attention. Taking a giant chunk of stockholder money to go buy your previous job really doesn’t bolster confidence in solving the problems in front of him. If he deson’t solve Intel’s core problematic issue buying VMWare probably won’t save Intel. It would likely just be money spent with low to negative return on investment.