NVIDIA Corp. said Thursday it will invest $5 billion in Intel Corp. and partner with the struggling chipmaker, a move that ties the industry’s dominant player to one of its long-time rivals. The companies said they will collaborate on custom data centers that power artificial intelligence (AI) infrastructure, as well as products for personal computers.
As part of the agreement announced Thursday, Intel will design custom data center CPUs to be paired with NVIDIA’s AI GPUs. The two chips will be linked using NVIDIA’s proprietary technology, enabling faster communication between them than previously possible.
In the consumer market, NVIDIA will supply Intel with a custom graphics chip to be paired with Intel’s PC processors using the same high-speed connections, a combination that could give Intel an advantage over competitors like AMD Inc.
NVIDIA is purchasing Intel common stock at $23.28 per share, subject to regulatory approval. The announcement sent Intel shares soaring 30% in premarket trading Thursday.
“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 in a statement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
The pact, on the heels of the U.S. government taking a roughly 10% stake in the company, will make NVIDIA one of Intel’s largest shareholders, with about 4%. Though the pact calls for Intel and NVIDIA to co-develop chips for PCs and data centers, it does not extend to Intel’s contract manufacturing unit, or foundry, producing chips for NVIDIA.
Analysts say Intel’s foundry business will likely need to secure a major customer such as NVIDIA, Apple Inc., Qualcomm Inc., or Broadcom Inc. if it is to remain viable.
The partnership could pose a challenge to Taiwan Semiconductor Manufacturing Co., which currently produces NVIDIA’s flagship processors. That work could eventually shift to Intel if the collaboration deepens. AMD, a rival to Intel in supplying data center chips, also faces potential setbacks as NVIDIA throws its weight behind Intel.
In a post on X, Futurum Group CEO Daniel Newman gave his thoughts: “I said over and over again… If the US government backs $INTC, everything will fall into place for it. It’s happening…”
