Nvidia is making a bold move by investing 5 billion dollars in Intel, its longtime rival, through a direct equity stake. The goal is to co-develop a new generation of chips for personal computers and data centers, at the heart of the global battle for artificial intelligence.
Following the announcement made at 1:49 pm on Thursday, Intel’s stock soared by 29% in pre-market trading to reach $31.97, its highest level since the summer of 2024. Nvidia, on the other hand, rose by 3%.
Nvidia – Intel: A Deal Shaking Silicon Valley
Intel and Nvidia, two long-time rivals, are joining forces in a context where AI is completely reshaping the hierarchy of the semiconductor industry. Intel, weakened for several years, had already received major support last month: the American government, under the Trump administration, acquired 10% of its shares to secure national production of strategic chips.
This partnership with Nvidia is a turning point. The California-based chipmaker, surpassed by Nvidia in 2020 as the sector’s top market cap, has struggled to establish a presence in the AI server market. Now, it is counting on the firepower of its former rival to regain relevance.
The Terms of the Deal: Nvidia Invests $5 Billion
Concretely, Nvidia is acquiring $5 billion worth of Intel shares at $23.28 per unit. But the stakes go beyond finance. According to Jensen Huang, CEO of Nvidia, this is an “integration of two world-class platforms“. The idea: combine Nvidia’s graphics processors, essential in AI infrastructure, with Intel’s general-purpose processors.
Two projects are already on the table. First, Intel will design custom CPUs integrated into Nvidia’s AI platforms for data centers. Then, the two groups will collaborate on a new generation of chips for PCs.
Lip-Bu Tan, Intel’s new CEO, applauds a partnership that is set to “reinvent offerings for customers and reignite growth“.
The Collateral Losers
This alliance doesn’t bode well for everyone. Arm, Nvidia’s current partner on CPUs, saw its stock fall by 5% in the aftermath. Its majority shareholder, the Japanese SoftBank, had announced in August a $2 billion investment in Intel. A move that now takes a different turn.
Intel, whose foundry division is still losing billions, hopes to attract new customers and get back on track. For Nvidia, already the undisputed leader in AI, this strategic diversification strengthens its hold on the entire semiconductor value chain.
A New Era for Computing
With this alliance, American tech sends a strong signal: in the face of global competition, industry giants are no longer hesitant to join forces. For investors, the Nvidia-Intel agreement could mark the beginning of a new era, where artificial intelligence not only redefines usage but also reshapes alliances at the top.
