Nvidia to invest $5 billion in Intel – intel news on AI and PC chip collaboration

Nvidia has announced that it will invest $5 billion in Intel, becoming one of the largest shareholders in the American chipmaker. The move is expected to strengthen cooperation between the two companies in developing new technologies for artificial intelligence and personal computing.

According to the announcement, Nvidia will buy Intel’s common stock at $23.28 per share. This will give Nvidia around 4 percent ownership in Intel. The deal comes just weeks after the US government took a 10 percent stake in Intel and Japan’s SoftBank pledged a $2 billion investment in the company.

Nvidia to invest $5 billion in Intel

The investment is seen as a lifeline for Intel, which has been losing market share in the data center and PC chip segments. Intel has been raising cash by selling assets while struggling to keep up with rivals in advanced semiconductor manufacturing. The partnership with Nvidia signals renewed support for the company’s turnaround efforts.

Industry analysts note that while $5 billion may not be enough to solve Intel’s foundry challenges, Nvidia’s backing adds confidence and stability to the company. Intel shares jumped nearly 30 percent in premarket trading after the news, while Nvidia shares also gained over 3 percent.

What Nvidia and Intel plan to build

As part of the agreement, Intel will design custom x86 CPUs for Nvidia’s AI platforms. These processors will be integrated with Nvidia’s infrastructure for data centers. For personal computers, Intel will develop new system-on-chips (SOCs) that combine its CPUs with Nvidia RTX GPU chiplets, aiming to bring high-performance computing to a wider range of PCs.

The collaboration does not include Intel’s foundry business manufacturing Nvidia chips. However, many market watchers believe that this partnership could eventually open doors for Nvidia to use Intel’s foundries in the future, challenging Taiwan’s TSMC, which currently makes Nvidia’s flagship processors.

Wider impact on the chip industry

The deal comes at a time when global competition in AI chips and advanced processors is intensifying. Analysts say the partnership could increase pressure on companies like AMD and TSMC, both of which compete directly with Intel and Nvidia in data centers and manufacturing.

For Nvidia, the investment also strengthens its ties with the US government, which is pushing for more domestic chip production amid growing concerns about supply chains and dependence on overseas manufacturing.

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• reuters.com
• livemint.com
• bloomberg.com