Nvidia to Invest $5 Billion in Intel, Forging Landmark AI Partnership

Nvidia announced a $5 billion investment in Intel, a company that was once its fiercest rival.

The deal is being called one of the most important alliances in chipmaking history and has already sent shockwaves through the stock market and global tech industry.

Investment Details

Nvidia is buying Intel stock at $23.28 per share, just below Intel’s last closing price of $24.90.

This deal will give Nvidia about 4% ownership in Intel, making it one of Intel’s biggest shareholders.

Interestingly, Nvidia is paying more per share than the U.S. government, which recently bought a 9.9% stake in Intel at $20.47 per share.

The timing is notable because 20 years ago Intel passed on buying Nvidia for $20 billion.

Today, Nvidia is the world’s most valuable tech company, while Intel has struggled to keep up in the fast-growing AI industry.

Key Features of the Collaboration

Data Center Products: Intel will design custom x86 processors for Nvidia’s AI platforms. These CPUs will connect directly with Nvidia’s GPUs using NVLink technology, offering much faster speeds than traditional PCIe connections. This will make AI systems more powerful and efficient.

PC Products: Intel will build new “x86 RTX System-on-Chips (SoCs)”, combining its CPUs and Nvidia’s RTX GPU chiplets onto the same chip. This could transform gaming laptops and desktops, offering performance well beyond today’s separate CPU-GPU systems.

This tight integration could give Intel a strong edge against AMD, which has been growing by offering combined CPU-GPU solutions.

Industry Impact

The announcement is a game-changer for the semiconductor industry.

AMD Pressure: AMD, known for its combined CPU-GPU chips, will now face much tougher competition. Its stock fell over 4% on the news.

TSMC Concerns: Taiwan Semiconductor Manufacturing Company, which currently produces many of Nvidia’s advanced chips, could lose some future contracts if Intel regains its manufacturing strength. TSMC stock dipped nearly 2%.

Intel’s Turnaround: This deal validates the turnaround plan of Intel’s new CEO, Lip-Bu Tan, who took charge in March. Analysts see it as a bold step that puts Intel back in the AI race.

Government and National Strategy

This partnership also fits into a broader U.S. semiconductor strategy.

Just weeks ago, the U.S. government invested $8.9 billion in Intel, while Japan’s SoftBank put in another $2 billion.

President Donald Trump has praised Intel as “a Great American Company with an even greater future” and has signaled 100% tariffs on foreign-made chips unless companies commit to U.S. production.

The Nvidia-Intel deal strengthens this national push to rebuild America’s semiconductor leadership.

Market Reaction

The news caused Intel’s stock to jump over 30% to about $33 per share, one of its biggest gains in years. Nvidia’s stock rose 3%, while AMD fell more than 4% and Taiwan Semiconductor dropped nearly 2%.

The overall tech sector also got a boost from this deal and a recent Fed interest rate cut.

Future Plans

Intel and Nvidia said their partnership will last for many product generations, not just one.

Since chip development takes time, experts believe the first joint products could take a year or more to reach the market.

Importantly, Nvidia confirmed this does not replace its other roadmaps, like the Arm-based Grace Blackwell processors.

Instead, the Intel deal adds another powerful option, giving Nvidia flexibility across multiple platforms.

News Gist

Nvidia will invest $5 billion in Intel, buying shares at $23.28 each for a 4% stake. Intel’s stock jumped 30%, Nvidia gained 3%, while AMD and TSMC dipped.

The partnership aims at co-developing future semiconductor products.

FAQs

Q1: How much is Nvidia investing in Intel?

A1: Nvidia is investing $5 billion to buy Intel shares at $23.28 each.

Q2: What stake will Nvidia hold in Intel?

A2: Nvidia will own about 4% of Intel after the deal.

Q3: How did the market react to the deal?

A3: Intel stock soared 30%, Nvidia rose 3%, while AMD and TSMC shares fell.

Q4: What does this partnership mean for the future?

A4: Intel and Nvidia plan to co-develop multi-generation semiconductor products, with the first expected in a year or more.