Nvidia, the world’s leading chipmaker, announced on Thursday that it will invest $5 billion in Intel and begin a strategic collaboration with the struggling semiconductor company. Nvidia plans to purchase Intel common stock at $23.28 per share, a transaction that remains subject to regulatory approval. The investment follows the U.S. government’s recent acquisition of a 10% stake in Intel.
Nvidia CEO Jensen Huang described the agreement as “a fusion of two world-class platforms,” combining Intel’s decades of experience producing central processing units (CPUs) used in most laptops and servers with Nvidia’s expertise in graphics processing units (GPUs) that power modern artificial intelligence (AI). “This partnership recognizes that computing has fundamentally changed,” Huang said. “The era of accelerated and AI computing has arrived.”
News of the deal sent Intel shares up nearly 23%—their largest single-day percentage gain since 1987—while Nvidia’s stock rose by more than 3%.
Nvidia deal and U.S. backing give Intel a much-needed boost
Under the agreement, Intel will develop custom chips for data centers that Nvidia will integrate into its AI infrastructure platforms. For personal computing, Intel will produce processors that incorporate Nvidia technology, aligning the two companies’ strengths across enterprise and consumer segments.
The partnership offers a lifeline for Intel, a longtime Silicon Valley pioneer that dominated the PC era but faltered during the mobile revolution and has struggled to regain momentum amid the AI-driven surge that lifted Nvidia to the top of the industry. Intel reported large losses last year and in the first half of this year and has announced plans to reduce its workforce by roughly 25% by the end of 2025.
Last month, the U.S. government acquired a 10% stake in Intel—433.3 million shares of non-voting stock priced at $20.47 each—intending to strengthen domestic technology and manufacturing. Nvidia’s investment is separate from that government stake; Huang emphasized that the administration had no role in shaping the Nvidia–Intel partnership, though he said he expected federal officials would be supportive.
Following Nvidia’s investment announcement, the market value of the U.S. government’s stake rose to approximately $13.2 billion, an increase of about $2.5 billion from before the news.
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Nvidia–Intel pact a “game-changer” for U.S. tech
Huang said discussions between Nvidia and Intel have been ongoing for about a year. Intel’s CEO, Lip-Bu Tan, who joined Huang on the call, noted he has been in dialogue with Nvidia since taking the helm in March. “This is a very big, important milestone,” Tan said. “I call it a game-changing opportunity that we can work together.”
Analysts reacted positively. Wedbush Securities’ Daniel Ives called the deal “bullish for U.S. tech,” saying it brings Intel “front and center into the AI game” and, coupled with the U.S. government’s investment, marks a notable turnaround after years of disappointment for shareholders.
Nvidia’s rise has been driven by its specialized GPUs, which excel at the parallel processing tasks required to train and run large AI models. The partnership positions Intel to regain relevance in the AI era by leveraging Nvidia’s software and hardware advancements while contributing Intel’s manufacturing and CPU expertise.
Another major chipmaker, Advanced Micro Devices (AMD), was not part of the announcement; AMD shares dipped slightly on the news. Intel, Nvidia, and AMD all maintain headquarters in Santa Clara, California, and continue to compete in various market segments.
Chip rivalry intensifies as China boosts Huawei and bans Nvidia
The deal comes amid broader geopolitical shifts in the semiconductor industry. China is working to reduce reliance on U.S. technology, and recent reports indicate Chinese authorities restricted several large domestic companies from purchasing Nvidia chips. At the same time, Huawei stated it is expanding efforts to develop its own AI chips and domestic manufacturing capabilities.
Although Nvidia and Intel have agreed to collaborate on new chip designs, a formal manufacturing arrangement has not been finalized. Nvidia’s potential access to Intel’s fabrication facilities could create competitive pressure for Taiwan Semiconductor Manufacturing Company (TSMC), which currently manufactures many of Nvidia’s leading processors. Huang stressed that both Nvidia and Intel remain significant customers of TSMC.
The announcement coincided with public appearances by industry leaders on the international stage. At a trans-Atlantic technology event, U.S. political leaders and tech figures highlighted AI’s growing global influence. In a lighter moment, Huang joked about a recent royal banquet, telling Intel’s CEO that “the cognac was excellent, but just not enough of it,” underscoring the high-profile nature of the meetings surrounding the partnership announcement.
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