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AMD, Nvidia shares drop after Intel hires AMD's ex-graphics head to take them on

Tae Kim
Intel announced on Wednesday it hired the former head of AMD’s graphics business and will start a new high end graphics group inside the company.

The battle over the red-hot graphics chip market just got more interesting.

Intel announced on Wednesday it hired the former head of AMD's graphics business and will start a new high performance graphics group inside the company.

Raja Koduri was named Intel's chief architect and senior vice president of the newly formed Core and Visual Computing Group and general manager of a new initiative to drive edge computing solutions.

"In this position, Koduri will expand Intel's leading position in integrated graphics for the PC market with high-end discrete graphics solutions for a broad range of computing segments," the company said in a news release.

Shares of AMD are down 3.5 percent shortly after Thursday's market open following the report. Nvidia and Intel stock fell 1.9 percent and declined 0.9 percent, respectively.

Intel's chief engineering officer, Dr. Murthy Renduchintala, said he believes the new hire will enable the company to better compete with its rivals such as AMD and Nvidia in the graphics chip market.

"We have exciting plans to aggressively expand our computing and graphics capabilities and build on our very strong and broad differentiated IP foundation," Renduchintala said in the 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."

Koduri's previous role was chief architect of the Radeon Technologies Group, which is AMD's graphics business. He will start at Intel in early December.

AMD sent the following statement when asked for comment on Intel's new hire:

"We have a very strong graphics team and will continue our focus on building great products. We also have industry-leading graphics IP and, if necessary, will vigorously defend it."

AMD shares rose 7 percent on Monday on the announcement the chipmaker will collaborate with Intel to compete with Nvidia in the laptop chip market.

AMD shares are up 3 percent year to date through Wednesday versus the S&P 500's 16 percent gain.