Investment

Nvidia agreed to invest $5B in Intel, becoming one of Intel’s largest shareholders.

Context

Intel dominated the computer chip industry for decades, but has struggled in recent years as artificial intelligence transformed the tech landscape. Nvidia replaced Intel as the world’s most valuable chipmaker in 2020.

Intel's manufacturing business has been losing billions of dollars annually and struggling to attract external customers. Last month, the US government took a 10% stake in Intel as the Trump Administration sought to secure American chip manufacturing.

Partnership

The two Silicon Valley rivals announced Thursday that Nvidia would buy $5B worth of Intel shares, worth around 4% of the company. The companies will work together to develop chips that combine Intel's general-purpose processors with Nvidia's graphics technology. “This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel's CPUs,” said Nvidia’s CEO.  Following the announcement, Intel shares reached their highest level since July 2024.

Government Stakes

The investment comes just weeks after the US government took a stake in Intel and follows Japan’s SoftBank’s $2B investment in Intel last month. With Thursday's stock surge, the government's stake has already increased in value by more than 50%, or about $4.9B. The Trump Administration has been actively working to secure Intel's future in an effort to strengthen the US chip industry.

The news also broke shortly after Chinese government officials warned the country’s largest companies - TikTok, Alibaba and more - not to use Nvidia’s RTX Pro 6000D chip, a chip that Nvidia specifically made for China.

Manufacturing Questions

Despite the partnership, the deal stops short of having Intel manufacture Nvidia’s most advanced AI chips, which are currently produced by Taiwan Semiconductor Manufacturing Company. Industry analysts say Intel needs a major customer like Nvidia to survive, but a manufacturing arrangement is not part of the current deal. The collaboration focuses on Intel designing custom processors for Nvidia’s AI platforms and Nvidia providing graphics chips for Intel’s PCs, but leaves Intel’s struggling manufacturing arm without the boost many expect it needs.