Pat Gelsinger Just Backed a $100 Million Challenge to Nvidia’s AI Networking Moat. AMD Could Benefit

Former Intel CEO Pat Gelsinger is backing a startup that thinks AI's next bottleneck is not the accelerator. It is everything waiting for data to arrive.

Delos Data announced on September 15 that it raised more than $100 million to develop networking chips and software for increasingly heterogeneous AI data centers. Playground Global, where Gelsinger is a general partner, joined the round. Reuters reported that Delos is designing the network to work across different types of compute hardware rather than assuming every accelerator comes from NVIDIA Corporation (NASDAQ: NVDA ).

That makes Advanced Micro Devices, Inc. (NASDAQ: AMD ) an important read-through even though AMD is not an investor in Delos.

For illustration purposes only. Photo by Brett Sayles on Pexels

Nvidia does not dominate AI simply because its GPUs are fast. NVIDIA Corporation (NASDAQ:NVDA) sells a tightly integrated system of accelerators, networking, interconnects and software. That makes large clusters easier to deploy and gives customers fewer reasons to mix architectures.

Delos is betting the market becomes less uniform as inference expands. Its pitch is that a data center should be able to connect whatever mix of accelerators makes economic sense. Gelsinger described idle compute waiting for data as a major waste of both money and energy.

If that architecture works, AMD benefits indirectly. Advanced Micro Devices, Inc. (NASDAQ:AMD) has been improving Instinct accelerator performance and winning AI deployments, but every friction point involved in mixing AMD hardware with another vendor's ecosystem protects Nvidia. Hardware-agnostic networking could lower that friction.

The counterargument is brutal: Nvidia already has scale, mature software and networking products customers know work. A startup with $100 million of financing is attacking an incumbent that spends billions on research and sells the full rack. Delos also has to prove its claimed performance improvements in commercial deployments.