Nvidia invests $5 billion in Intel for AI chip partnership

Nvidia has agreed to purchase a $5 billion stake in Intel, becoming one of the chipmaker’s largest shareholders and cementing a strategic partnership to co-develop “multiple generations” of data center and PC products.

Nvidia will acquire the Intel shares at $23.28 apiece, slightly below Intel’s prior trading price. The investment will give Nvidia roughly a 4% ownership stake, according to Reuters. Following the announcement, Intel shares surged as much as 30% in early trading Thursday.

Building Chips Together

At the heart of the deal is an integration of the companies’ architectures using Nvidia’s NVLink interface, which enables much faster data transfers between CPUs and GPUs compared to PCI Express. NVLink is considered critical for AI workloads, which require massive clusters of GPUs working in parallel.

• Data centers: Intel will design and manufacture a new line of x86 CPUs tailored for Nvidia’s AI infrastructure, targeting enterprise and hyperscale clients.
• Consumer PCs: Intel will build x86 system-on-chips (SoCs) that incorporate chiplets of Nvidia’s RTX GPUs, marketed for now as “x86 RTX SoCs.” These chips aim to power a wide range of PCs and provide Intel an advantage against rival AMD.

Intel Seeks a Comeback

The collaboration arrives during a turbulent period for Intel, which has struggled to capitalize on the AI chip boom. In recent years, the company has:

• Brought in a new CEO
• Cut thousands of jobs in cost-saving measures
• Shelved some manufacturing projects to restore profitability

By aligning with Nvidia, Intel hopes to regain relevance in both data center AI and consumer computing, areas where it has ceded ground to competitors.

Nvidia’s Dominance

For Nvidia, the partnership comes amid unprecedented growth. The company recently posted another record-breaking quarter, extending its lead as the world’s most valuable semiconductor company and one of the largest by market cap globally.

The deal positions Nvidia to expand its ecosystem while gaining a foothold in Intel’s manufacturing capabilities and advanced packaging technologies.

“Intel’s leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable new breakthroughs for the industry,” said Intel CEO Lip-Bu Tan in a statement.

Outlook

If successful, the collaboration could help Intel claw back market share from AMD while giving Nvidia a broader base for its AI and PC ambitions. For both companies, the deal marks one of the biggest strategic tie-ups in the semiconductor industry in years.