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What you need to know about Nvidia and VMware’s big new A.I. deal

September 29, 2020, 4:00 PM UTC

Nvidia and VMware have partnered on a major artificial intelligence deal in which VMware will make its data center software compatible with Nvidia’s computer chips tailored for deep learning.

VMware announced the partnership on Tuesday amid its annual VMworld conference, held online this year owing to the coronavirus pandemic. As part of the partnership, VMware CEO Pat Gelsinger told Fortune that Nvidia will ensure that the developer software that accompanies its A.I. chips will work with VMware Tanzu technology, which incorporates the trendy container technology that coders use to build apps that work with multiple cloud computing services and in-house data centers.

It’s an important deal for VMware as it faces increased competition from companies like IBM and Hewlett Packard Enterprise, which are heavily pushing their respective container technologies under the belief that more companies are looking to use multiple cloud computing services while operating their own data centers. 

As A.I.’s popularity grows within businesses, these enterprise technology companies are attempting to make their IT management software work more efficiently with machine learning technologies to lure more customers. Earlier this month, for instance, IBM and oil industry services company Schlumberger partnered on an initiative in which the two companies will offer software that lets oil companies more easily use machine learning technologies to analyze data stored in internal data centers or in third-party cloud computing services.

Pat Gelsinger
Pat Gelsinger, VMware CEO, pictured in 2017, says his company and Nvidia worked together to ensure that their tech is compatible.
Patrick T. Fallon—Bloomberg via Getty Imag

“A lot of times CEOs get together and say, ‘Let’s do something bold,’ and it’s another Barney announcement,” Gelsinger said regarding technology partnerships that lack substance. The partnership with Nvidia, he said, required the companies to work together to make sure their respective technologies are compatible, a laborious task. 

Gelsinger said he has known Nvidia CEO Jensen Huang “for decades” both as a business partner and competitor at several moments in his career. Prior to becoming VMware’s CEO, Gelsinger spent 30 years working at Intel, a significant rival to Nvidia in the semiconductor market.

“We sat on the opposite side of the table with lawsuits with each other,” Gelsinger said, referencing the companies’ various legal spats, including a patent lawsuit that they eventually settled in 2011. 

Gelsinger remained diplomatic when asked about what VMware’s deal with Nvidia meant for his former company Intel, which has recently faced a number of significant setbacks like experiencing manufacturing problems with a computer chip that analysts deemed important to its overall business.  

He said that VMware still has a number of partnerships with Intel and that he respects “the role of the CPU,” referring to Intel’s bread-and-butter semiconductors used in corporate data centers.

Still, “Nvidia is the No. 1 A.I. company in the world,” Gelsinger said, referring to the company’s so-called graphics processing units (GPUs) that many companies are using to train their deep learning systems.

“They are way ahead of anybody in the industry in this space,” Gelsinger said.