Nvidia has announced a $5 billion investment in Intel, becoming one of the chipmaker’s largest shareholders and giving a major boost to Intel’s turnaround efforts. The deal secures Nvidia a 4% stake in Intel through newly issued shares, sending Intel’s stock surging 23% on Wall Street. This move comes just weeks after the U.S. government stepped in with a 10% stake as part of an emergency stabilization plan.
Under the agreement, Nvidia and Intel will jointly develop chips for PCs and data centers. While Nvidia has not signed Intel’s foundry division to produce its GPUs, Intel will supply CPUs and advanced packaging for the joint products. Nvidia CEO Jensen Huang emphasized that the White House was not directly involved in the deal but noted the administration would likely support such collaboration.
Industry experts view this as a lifeline for Intel, whose manufacturing struggles have threatened its position in the semiconductor market. Some analysts believe the partnership could even be the first step toward an eventual acquisition or restructuring of Intel by U.S. chipmakers.
Nvidia is purchasing its stake at $23.28 per share — slightly below Intel’s closing price of $24.90 on Wednesday but higher than the $20.47 paid by the U.S. government. Nvidia’s own stock rose 3.8% following the announcement. Intel has also secured $2 billion from SoftBank and $5.7 billion from the U.S. government, further strengthening its cash reserves.
The pact is expected to shake up the global chip race. TSMC, which currently manufactures Nvidia’s flagship processors, could face long-term risks if Intel becomes a stronger foundry partner. AMD, meanwhile, may feel pressure in the data center and consumer PC segments.
Intel’s new CEO, Lip-Bu Tan, appointed in March, has pledged leaner operations and disciplined expansion. Analysts see the Nvidia deal as critical to reviving Intel’s role in the AI era. The companies plan to co-develop custom Intel processors designed to work seamlessly with Nvidia’s AI chips via a proprietary interconnect, giving Intel a role in every Nvidia AI server sold and positioning it as a challenger to Broadcom’s dominant chip-to-chip solutions.
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