Nvidia Bets Big on Intel With $5B Investment

KEY TAKEAWAYS

• Nvidia is investing $5 billion in Intel and will co-develop chips for PCs and data centers, the companies announced Thursday.
• Nvidia said it will buy Intel common stock at $23.28 a share, around 7% below where they closed yesterday.
• Intel shares soared in early trading Thursday following the news. Nvidia shares also climbed.

Nvidia (NVDA) is investing $5 billion in embattled chipmaker Intel (INTC) and will jointly develop chips for PCs and data centers, the companies announced Thursday.

Investors sent shares in Intel soaring on the news, seen as a massive vote of confidence by the chip designer at the heart of the AI boom, even though Nvidia's outlay came at a discount. Nvidia said it will buy Intel common stock at $23.28 a share—around 7% below where they closed yesterday. Shares of Intel were up over 25% in recent trading, while Nvidia shares climbed 2%.

Intel will build custom data center chips that Nvidia will "integrate into its AI infrastructure platforms and offer to the market," and also make personal computing chips that will integrate "Nvidia RTX GPU chiplets," the companies said.

Nvidia CEO Jensen Huang called it a "historic collaboration" that fuses two "world-class platforms," adding "together, we will expand our ecosystems and lay the foundation for the next era of computing."

Intel CEO Lip-Bu Tan, meanwhile, said the company’s “leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership.”

Wedbush analyst Dan Ives said in a televised interview with Bloomberg that the deal "brings Nvidia into the AI game," and Jefferies analysts said they expect it could help Intel "become more healthy in the longer term."

Once a leading chipmaker, Intel has fallen behind rivals like chip manufacturer TSMC (TSM) and struggled to keep up with technological advancements in the space. The Trump administration is pushing to make the company a national champion in the production of AI chips, however, and last month said it would take a 10% stake in the company.

This article has been updated since it was first published to include additional information and reflect more recent share prices.

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