Nvidia on Thursday announced it will invest $5 billion in Intel, becoming one of the U.S. chipmaker’s largest shareholders and signaling fresh support for the struggling company. The move, however, stops short of awarding Intel the coveted contract manufacturing business that analysts say is crucial for its long-term survival.
As part of the agreement, Nvidia and Intel will jointly develop processors for data centers and personal computers, pairing Intel’s CPUs with Nvidia’s powerful graphics chips. The companies said the collaboration will deliver faster chip-to-chip communication, a feature seen as vital to meeting the growing demands of artificial intelligence workloads.
Intel shares surged 12% in premarket trading following the announcement, while Nvidia shares rose 2%. Under the deal, Nvidia will purchase Intel stock at $23.28 per share, just below Wednesday’s closing price of $24.90 but above the $20.47 paid last month by the U.S. government, which took a 10% stake in Intel. Nvidia’s investment will likely give it ownership of at least 4% of Intel once the transaction is completed.
The deal comes at a pivotal time for Intel. Once a dominant force in global chipmaking, the company has struggled in recent years to regain ground from rivals such as Taiwan Semiconductor Manufacturing Company (TSMC) and AMD. New CEO Lip-Bu Tan, appointed in March, has pledged to streamline operations and align factory expansion more closely with market demand.
While the partnership marks an important vote of confidence, Intel still faces hurdles. Crucially, the agreement does not involve Intel manufacturing Nvidia’s chips—a business that could determine whether Intel’s contract foundry can attract major customers. For now, Nvidia continues to rely on TSMC to produce its flagship processors, leaving Intel without the anchor client its foundry business needs.
The investment adds to Intel’s growing cash reserves. In recent weeks, the company secured $2 billion from SoftBank and $5.7 billion in U.S. government funding. Intel’s Chief Financial Officer David Zinsner said last month that the company was well positioned financially and would only require additional capital once it saw meaningful demand for its next-generation manufacturing process, known as 14A.
The new collaboration could reshape the competitive landscape. For data centers, Intel will design custom CPUs to be paired with Nvidia GPUs, creating servers capable of handling massive datasets at unprecedented speeds. In consumer markets, Nvidia will provide Intel with custom graphics processors to package with its PC chips, potentially giving Intel a stronger position against AMD.
“This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem,” Nvidia CEO Jensen Huang said in a statement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
The companies said they plan to produce “multiple generations” of products under the deal, though no timeline was provided for their release.
