Nvidia, the world’s leading chipmaker, has announced plans to invest $5bn in Intel and collaborate with the struggling semiconductor company on products.
A month after the Trump administration confirmed it had taken a 10% stake in Intel – the latest extraordinary intervention by the White House in corporate America – Nvidia said it would team up with the firm to work on custom datacenters that form the backbone of artificial intelligence (AI) infrastructure, as well as personal computer products.
Intel shares jumped nearly 23% after markets closed, making it the largest one-day percentage gain for the company since 1987. Nvidia rose more than 3%, bolstering its $4tn market value.
Nvidia said it would spend $5bn to buy Intel common stock at $23.28 a share. The investment is subject to regulatory approvals.
“This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem – a fusion of two world-class platforms,” Nvidia CEO Jensen Huang said. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
The two companies said they would work on “seamlessly connecting” their architectures.
For datacenters, Intel will make custom chips that Nvidia will use in its AI infrastructure platforms. while for PCs products, Intel will build chips that integrate Nvidia technology.
The agreement provides a lifeline for Intel, a Silicon Valley pioneer that enjoyed decades of growth as its processors powered the personal computer boom, but fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone’s 2007 debut.
Intel fell even further behind in recent years amid the AI boom that has propelled Nvidia to become the world’s most valuable company. Intel lost nearly $19bn last year and another $3.7bn in the first six months of this year, and expects to slash its workforce by a quarter by the end of 2025.
Nvidia, meanwhile, has soared because its specialized chips are underpinning the artificial intelligence boom. The chips, known as graphics processing units, or GPUs, are highly effective at developing powerful AI systems.
Nvidia is the second firm investing billions of dollars into the flailing chipmaker. In August, Japan’s major tech investment firm Softbank announced it was investing $2bn in Intel in exchange for a 2% stake in the company’s business. Softbank’s investment came after initial reports the US government planned to take a stake in Intel first surfaced. The Intel investment would give the Japanese firm an expanded presence in the US.
