This deal highlights Nvidia’s rising influence in global tech. Once considered a niche graphics chipmaker.
In a move that stunned Wall Street, Nvidia Corp. has agreed to invest $5 billion in Intel Corp., sending Intel’s stock price soaring more than 23% in a single day — its biggest jump since 1987. The partnership, announced Thursday, will see the two chip giants co-develop products for PCs and data centers, signaling a dramatic shift in the semiconductor landscape.
Nvidia Buys a Stake in Intel
Under the agreement, Nvidia will buy Intel stock at $23.28 per share, giving it a stake of under 5%. With this deal, Intel will begin using Nvidia’s advanced graphics technology in its upcoming PC chips, while Intel’s processors will power some of Nvidia’s AI-focused data center products.
The collaboration opens doors to a market estimated at $50 billion annually, according to Nvidia CEO Jensen Huang. “We thought it was going to be such an incredible investment. The return on that investment is going to be fantastic,” Huang told analysts.
Intel’s Biggest Boost in Decades
Intel shares closed at $30.57, up nearly $6 on Thursday, marking the company’s strongest single-day rally in almost 40 years. Nvidia shares also rose 3.5%, hitting $176.32, and are up 31% this year.
This deal comes just weeks after the US government acquired a 10% stake in Intel, and Japan’s SoftBank invested $2 billion, underscoring the global push to revive American chipmaking dominance.
On paper, Washington’s stake in Intel has already grown by 55% in value, rising from $9 billion to about $14 billion.
Why Nvidia Is Betting on Intel
Intel has long been seen as struggling in the new AI era, losing ground to Nvidia and AMD. While Intel once dominated global computing, it was late to the market for AI accelerators, the chips now driving everything from ChatGPT to autonomous vehicles.
By joining forces, Intel gets a critical lifeline to improve its balance sheet and regain relevance in AI-driven data centers. Nvidia, meanwhile, secures broader access to Intel’s processor technology and an opportunity to expand its dominance beyond graphics chips.
Trouble for AMD?
The news rattled Advanced Micro Devices (AMD), which competes fiercely with both Intel and Nvidia. AMD stock briefly plunged 6% before recovering. Analysts called the deal “marginally negative” for AMD, but warned it could reshape the chip market if the cooperation deepens.
“Whether this is token cooperation for political optics or a real, long-term collaboration will decide how much Intel benefits,” Wolfe Research noted.
Industry Shifts and AI Wars
Just three years ago, Intel had more than double Nvidia’s revenue. Now, Nvidia is set to generate $200 billion in sales this year, with its data center unit alone surpassing Intel’s total revenue.
Intel’s decline has been compounded by losing its manufacturing edge to Taiwan Semiconductor Manufacturing Co. (TSMC), forcing it to outsource production of its most advanced chips.
Under new CEO Lip-Bu Tan, Intel is pursuing a more open, partnership-driven approach, and this Nvidia tie-up is its boldest step yet.
This deal highlights Nvidia’s rising influence in global tech. Once considered a niche graphics chipmaker, Nvidia is now the world’s most valuable semiconductor company, worth over $4 trillion. Intel, meanwhile, is fighting for survival — but Thursday’s deal may mark the start of its comeback.