Nvidia CEO Jensen Huang called it “a fusion of two world-class platforms” that combines Intel’s strength in making conventional computer chips…reports Asian Lite News
Nvidia, the world’s leading chipmaker, announced on Thursday that it’s investing $5 billion in Intel and will collaborate with the struggling semiconductor company. Nvidia said it will spend $5 billion to buy Intel common stock at $23.28 a share. The investment, which is subject to regulatory approvals, comes a month after the US government took a 10% stake in Intel.
Nvidia CEO Jensen Huang called it “a fusion of two world-class platforms” that combines Intel’s strength in making conventional computer chips, known as CPUs, that power most laptops, with Nvidia’s focus on the specialised graphics chips that are critical for artificial intelligence.
“This partnership is a recognition that computing has fundamentally changed,” Huang told reporters Thursday. “The era of accelerated and AI computing has arrived.” Intel shares jumped nearly 23%, its biggest one-day percentage gain since 1987. Nvidia shares added more than 3%.
For data centers, Intel will make custom chips that Nvidia will use in its AI infrastructure platforms. For personal computer products, Intel will build chips that integrate Nvidia technology.
The agreement provides a lifeline for Intel, which was a Silicon Valley pioneer that enjoyed decades of growth as its processors powered the personal computer boom, but fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone’s 2007 debut. Intel fell even farther behind in recent years amid the AI boom that’s propelled Nvidia into the world’s most valuable company. Intel lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, and expects to slash its workforce by a quarter by the end of 2025.
President Donald Trump’s administration stepped in last month to secure a 10% stake — 433.3 million shares of non-voting stock priced at $20.47 apiece — making it one of Intel’s biggest shareholders. Federal officials said they invested in Intel in order to bolster U.S. technology and domestic manufacturing. Of Nvidia’s own Intel stake, Huang said “the Trump administration had no involvement in this partnership at all,” though “would have been very supportive, of course.”
Intel’s stock price surge Thursday pushed the total value of the U.S. government’s stake in Intel to $13.2 billion, a $2.5 billion increase from before Nvidia’s announcement. Huang said Nvidia has been in talks with Intel for about a year. Intel CEO Lip-Bu Tan, who joined the press call with Huang on Thursday, said he’s been talking to Nvidia since he was named Intel’s new leader in March.
“This is a very big, important milestone,” Tan said. “I call it a game-changing opportunity that we can work together.” The deal is “bullish for US tech,” Wedbush Securities analyst Daniel Ives said in a client note.
Ives said it brings Intel “front and center into the AI game” and, combined with the U.S. government stake, adds to “a golden few weeks for Intel after years of pain and frustration for investors.” Nvidia, meanwhile, has soared because its specialized chips are underpinning the AI boom. The chips, known as graphics processing units, or GPUs, are highly effective at developing powerful AI systems.
Left out of the celebration Thursday was another U.S. chipmaking rival, Advanced Micro Devices. Shares in the leading maker of both GPUs and CPUs dropped slightly Thursday. AMD, Intel and Nvidia are all headquartered in Santa Clara, California. The deal between Nvidia and Intel comes as China moves to be less dependent on U.S. semiconductor technology. This week, Chinese officials reportedly forbade several large domestic technology companies from purchasing Nvidia chips, and China-based Huawei announced that it was expanding its development of AI chips and manufacturing.
