Nvidia has invested $5bn in Intel as part of an AI infrastructure collaboration that aims to ‘accelerate applications and workloads across hyperscale, enterprise and consumer markets’.
Intel shares jumped over 20% on the news.
Nvidia’s investment comes hot on the heels of an $8.9bn US government investment in Intel aimed at boosting domestic semiconductor production.
The Nvidia and Intel deal will see Intel build NVIDIA-custom x86 CPUs for use in data centres and manufacture new x86 RTX SOCs for personal computing.
“AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software. At the heart of this reinvention is NVIDIA’s CUDA architecture,” said NVIDIA founder and CEO Jensen Huang.
“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. Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
Nvidia paid $23.28 per Intel share, meaning they are already around 30% to the good on their investment.
But as analyst Matt Britzman explains, the investment is really a sideshow to the deeper collaboration that should appease the US President, who has made it clear he would like more chipmakers to manufacture their products in the US.
“Nvidia’s $5 billion investment in Intel is less about money and more about influence. The deal deepens cooperation between two US chip giants, with Intel set to use Nvidia’s GPU technology and Nvidia gaining a stronger foothold in domestic chip production,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“For Intel, this is another welcome boost, both financially and strategically, as it leans on Nvidia to stay competitive. But even with the US government and Nvidia on side, it’s one step short of a home run for the foundry business, which is struggling to attract the major customers it needs to succeed against the might of TSMC.
“For Nvidia, the financial impact is small, but the political upside is big: this move aligns with US policy and could help ease restrictions on selling advanced chips to China. It also signals a shift in industry dynamics, with Arm losing some exclusivity and AMD facing more pressure. In short, this is a strategic alliance with geopolitical undertones, not just a balance-sheet transaction.”