Nvidia announced Thursday it will invest $5 billion in Intel, acquiring a substantial 4% stake in the long-struggling chipmaker and helping reverse years of decline for a stalwart of the semiconductor industry.
Intel’s stock surged over 30% after news of the deal, making it one of the most dramatic turnarounds in recent market memory.
The investment, which prices Intel shares at $23.28 below Wednesday’s closing price, makes Nvidia one of Intel’s largest shareholders.
The deal, pending regulatory approval, signals new strategic ambitions as both companies seek to redefine the future of AI and personal computing development together.
Why did Nvidia invest in Intel now?
Intel has faced mounting challenges recently, losing ground to rivals in mobile, data center, and AI computing markets. With Nvidia’s investment, Intel gains a lifeline just weeks after securing a separate $8.9 billion investment from the US government, which also took a 10% stake.
Nvidia CEO Jensen Huang said, “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.”
The timing reflects Intel’s renewed focus on streamlining operations and expanding manufacturing only when demand justifies it.
Did you know?
Intel’s new CEO Lip-Bu Tan was only appointed in March 2025 and previously led Cadence Design Systems, bringing deep semiconductor expertise to the helm.
How does the partnership change chip industry dynamics
The partnership includes joint development of custom products for both data centers and PCs. Intel will engineer new x86 processors for Nvidia’s AI platforms, while Nvidia will provide RTX GPU chiplets and connect architectures with its NVLink technology.
This setup promises faster chip-to-chip communication, a vital advantage for AI workloads requiring rapid data transfers.
By joining forces, Nvidia and Intel challenge the status quo established by Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Company (TSMC), currently the main suppliers of rival AI processors and foundry services.
Analysts expect wider ecosystem support and broader industry momentum as the deal matures.
What joint products will Nvidia and Intel deliver
Under the new agreement, Nvidia will integrate Intel’s custom CPUs into its AI infrastructure platforms, with Intel also producing x86 system-on-chips featuring Nvidia RTX GPU chiplets for the PC market.
The NVLink interconnect will allow seamless data flow between CPU and GPU components, enhancing AI, gaming, and workstation performance.
Neither company disclosed an exact product timeline, but both confirmed current development roadmaps remain unchanged.
Analysts anticipate the first jointly developed chips to target high-performance data centers before trickling down to consumer PCs.
ALSO READ | CRWD Stock Market Cap Hits $111 Billion Amid Analyst Upgrades
How did investors and competitors react
Intel shares soared over 30% in premarket trading following the news, while Nvidia further solidified its position atop the AI hardware industry.
AMD’s shares dipped 4% on concern the partnership would erode its market share, and TSMC’s US-listed shares slipped 2% due to uncertainty around its role in Nvidia’s future supply plans.
The deal does not include Intel’s foundry business manufacturing Nvidia chips, a critical detail for Intel’s long-term manufacturing strategy. Instead, the focus remains on architectural collaboration and ecosystem integration.
What future implications does the deal have
The Nvidia-Intel alliance represents a new era of chip collaboration, potentially shifting competitive dynamics and challenging conventional rivalries in the semiconductor sector.
With AI and PC applications evolving rapidly, both firms seek to leverage their combined expertise to accelerate future computing technologies.
Analysts expect the partnership to shape industry standards and proliferate across both corporate and consumer markets.
Nvidia’s confidence in Intel signals renewed ambition for the beleaguered chipmaker and may inspire further investment and collaboration across the tech industry.
Comments (0)
Please sign in to leave a comment