Ex-Intel Chief Gelsinger Backs $100 Million Attack on Nvidia's Networking Moat

Former Intel CEO Pat Gelsinger is backing a startup with more than $100 million in fresh capital to challenge the part of Nvidia's AI empire that customers rarely question: the network.

Delos Data announced on September 15 that it raised over $100 million to develop networking chips and software for AI data centers that increasingly mix hardware from different vendors. Playground Global, where Gelsinger now serves as a general partner, joined the round. Reuters reported that Delos is designing its network to work across different types of compute hardware rather than assuming every accelerator comes from Nvidia.

That design choice makes Advanced Micro Devices an important read-through, even though AMD is not an investor in Delos.

The startup's thesis: idle compute is wasted money

Delos starts from a simple premise: AI's next bottleneck is not the accelerator itself. It is everything waiting for data to arrive.

Gelsinger shares that view. He described idle compute waiting for data as a major waste of both money and energy. The argument matters for operators running enormous clusters where GPUs sit paused while data moves across the network.

Nvidia's dominance rests on more than fast GPUs. The company sells a tightly integrated system of accelerators, networking, interconnects and software. That integration makes large clusters easier to deploy and gives customers few reasons to mix architectures. Networking is arguably the strongest link in that stack, because it is the glue holding the whole system together.

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, rather than whatever mix a single vendor's interconnect supports.

Why AMD gains if this works

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. Customers stay inside the incumbent's stack when the alternatives do not talk to each other cleanly.

Hardware-agnostic networking could lower that friction. If Delos delivers a network layer indifferent to whose accelerator sits at either end, AMD's accelerators become easier to slot into clusters alongside other vendors' hardware. AMD gets the benefit without writing a check.

The counterargument is brutal

Nvidia already has scale, mature software and networking products that customers know work. A startup carrying $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. The gap between a benchmark and a paying customer running production workloads has buried plenty of well-funded challengers.

Hedge funds added to both incumbents

While the startup stakes get set, institutional money keeps flowing to the incumbents.

Insider Monkey tracked 285 hedge funds holding Nvidia in Q2, up from 275 in Q1. Arrowstreet Capital raised its position 10% to roughly 34.7 million shares.

AMD's holder count climbed to 164 from 134 over the same period. Marshall Wace held approximately 3.9 million shares after increasing its stake modestly.

Short interest in AMD tells a more cautious story. The stock had about 41.7 million shares sold short as of August 31, equal to roughly 2.6% of float and 2.5 days to cover.

The signal from investors is clear on one point: they are not treating Nvidia and AMD as a winner-take-all pair. If Delos succeeds in commoditizing the network layer, the value of choosing AMD's accelerators rises — and the first proof point to watch is whether Delos lands commercial deployments that validate its performance claims.