Intel stole AMD's head of graphics to start its own graphics division - and Nvidia and AMD shares are falling

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Intel CEO Brian Krzanich.

• Intel hired away AMD's head of graphics for the same role at Intel.
• The move was a clear signal from Intel that it's now placing a real emphasis on graphics.
• AMD and Nvidia, the current champs of the GPU game, fell after the news.

Raja Koduri will be joining Intel as the company's head of the newly formed Core and Visual Computing Group, the position he left at AMD to pursue, Intel announced.

The move is a clear signal from Intel that it wants to ramp up its offerings in the high-end GPU space which has been dominated by the likes of AMD and Nvidia. Intel currently bakes some graphics processing into its CPUs, but those processors lack the power needed to run high-end games or artificial intelligence systems.

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Shares of AMD fell 4.1% to $11.23 and shares of Nvidia fell 2.5% to $203.94 after the news. Intel also was down after the news, falling 0.94% to $46.26.

"We have exciting plans to aggressively expand our computing and graphics capabilities," Murthy Renduchintala, the chief engineering officer at Intel, said in a news release. "With Raja at the helm of our Core and Visual Computing Group, we will add to our portfolio of unmatched capabilities, advance our strategy to lead in computing and graphics, and ultimately be the driving force of the data revolution."

It's clear that Intel is no longer content with being largely absent in the expanding GPU market. The growing adoption of artificial intelligence systems has led to an explosion in demand for the chips, especially in data centers, where much of the processing takes place. Nvidia and AMD have been the main producers of GPUs for years.

In addition to standalone GPUs, Intel is also working on expanding its integrated graphics performance. The company recently announced it would be working with AMD to develop a chip that combines Intel's CPU technology with AMD's GPU tech to power high-performance laptops with a smaller silicon footprint.

Koduri previously worked for Apple to introduce its Retina displays and will start at Intel in December.

Read more about Intel and AMD's new chip.

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