Nvidia is making a bold bet on Intel’s comeback, announcing Thursday a US$5 billion investment that will make it one of Intel’s largest shareholders and lay the groundwork for joint development of PC and data center chips. The move sent Intel shares soaring more than 32 per cent in premarket trading, while Nvidia rose over three per cent and competitors AMD and TSMC slipped.
Under the agreement, Nvidia will pay $23.28 per share for Intel stock, a price higher than what the U.S. government paid for its own extraordinary 10 per cent stake last month. Once completed, Nvidia will own roughly four per cent or more of Intel, giving the AI chip leader significant influence at the storied U.S. manufacturer.
The partnership stops short of granting Intel what analysts consider its “holy grail” — a major foundry contract to manufacture Nvidia’s flagship chips — but it could still reshape the industry. The two companies will co-develop custom processors for data centers and PCs, linking Nvidia’s powerful GPUs with Intel CPUs using proprietary high-speed interconnect technology. This will allow Intel to earn revenue on every Nvidia-powered AI server sold and give it a fresh competitive edge against AMD and Broadcom in the race for AI dominance.
For consumer markets, Intel will gain access to Nvidia-designed graphics chips for PCs, potentially helping it claw back market share as x86-based processors face growing competition from Arm-based designs.
Intel’s new CEO, Lip-Bu Tan, has been aggressively working to stabilize the company after years of missed opportunities and declining dominance. Recent cash infusions — including $2 billion from Softbank and $5.7 billion from the U.S. government — have given Intel breathing room as it invests in its next-generation 14A manufacturing process.
Nvidia CEO Jensen Huang hailed the collaboration as a “fusion of two world-class platforms,” saying it would “lay the foundation for the next era of computing.” While neither company has given a timeline for the release of joint products, they said multiple generations are planned.