New Delhi: Nvidia has announced a surprise $5 billion investment in Intel, with both companies agreeing to co-develop chips for PCs and data centers. Nvidia will acquire Intel stock at $23.28 per share, giving the struggling chipmaker a much-needed financial push.
According to Bloomberg, Intel’s shares surged by as much as 26 percent in pre-market trading after the deal was revealed. The partnership marks one of the most unexpected alliances in Silicon Valley, considering the fierce rivalry between the two Santa Clara-based companies.
The agreement will see Intel use Nvidia’s graphics technology in its future PC chips, while Intel will provide processors for Nvidia’s data center hardware. Although both sides have clarified that their long-term plans remain unchanged, the collaboration has been framed as an effort to support innovation in a market that has seen growing competition.
Jensen Huang, Nvidia’s chief executive, said in a statement that “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.” He added that together the two will expand their ecosystems and lay the foundation for what he called the next era of computing.
Intel has faced pressure in recent years as it lost ground to rivals in both PC and data center segments. The company has been raising funds through asset sales and recently received investments from the US government, which took a 10 percent stake, and from Japan’s SoftBank, which put in $2 billion. Despite these efforts, Intel’s ability to fund cutting-edge chip production has been strained.
For Nvidia, which has a market capitalization of more than $4 trillion, the investment is relatively small. Intel’s market value stood at $116 billion at the close of Wednesday’s trading, which means Nvidia’s stake is under 5 percent.
Intel will launch PC chips that integrate general-purpose processing with Nvidia’s powerful graphics, a strategy meant to compete more effectively with Advanced Micro Devices, which has gained ground in desktops and laptops. For consumers, this could mean devices that handle both everyday computing and advanced graphics tasks more smoothly.
In data centers, the tie-up highlights Nvidia’s dominance in artificial intelligence hardware. Its accelerators already lead the market, but as these chips are combined into large computing clusters, general-purpose processors are still needed to handle tasks outside of AI. Intel will provide these processors, slotting itself into Nvidia’s broader ecosystem.
Intel’s chief executive Lip-Bu Tan welcomed the collaboration, saying, “we appreciate the confidence Jensen and the Nvidia team have placed in us with their investment and look forward to the work ahead as we innovate for customers.” He noted that Intel’s x86 architecture has been foundational to modern computing and will continue to enable workloads of the future.
Nvidia still designs its own processors using technology from Arm, and the company has said those plans remain unchanged. For now, the collaboration with Intel looks more like a tactical partnership than a shift in Nvidia’s larger roadmap.
For those of us who have followed the chip wars for years, it almost feels surreal to see Intel leaning on Nvidia, a company it once overshadowed. A decade ago, Nvidia was known mainly for graphics cards powering games at 120 fps on PCs. Today, it is the world’s most valuable chipmaker and the leader in artificial intelligence computing.
