One of the world’s most valuable companies is throwing Intel a lifeline.
Nvidia, which has a market cap of $4.3 trillion, said today that it will invest $5 billion in Intel, the struggling US chipmaker that was recently at the center of an unorthodox investment deal with the US government. Intel shares jumped more than 30 percent following the news.
The two American chip makers are also entering into a product collaboration. Intel said in a statement early Thursday morning that “Intel’s leading CPUs and x86 ecosystem will be seamlessly connected with NVIDIA’s AI and accelerated computing capabilities using NVLink,” referring to Nvidia technology that connects CPUs with GPUs.
Intel CEO Lip-Bu Tan posted a photo on X with Nvidia cofounder and CEO Jensen Huang. Tan wrote that he was excited to team up with his “good friend Jensen” to jointly develop custom data center and PC chips.
In a press briefing, Huang emphasized that the deal will allow Nvidia to scale its rack architecture systems that combine 72 GPUs with custom CPUs. Huang also said that working with Intel means Nvidia can take a bigger slice of the personal device market. “There are 150 million laptops sold per year,” he said. “We’re now creating a system-on-a-chip that fuses two processors into one giant SoC, and that will become a new class of integrated laptops that the world has never seen before.”
Huang estimated that the deal represents between “$25 billion and $50 billion of annual opportunity.”
Nvidia’s investment comes on the heels of the US government taking a roughly 10 percent stake in Intel by converting billions of dollars in CHIPS Act grants into an equity investment.
The US government has also been reevaluating export controls, which have limited Nvidia’s (and AMD’s) ability to sell advanced GPUs to China. The administration recently said that it would grant export licenses to Nvidia and AMD, enabling them to sell certain chips to China, if the companies gave the US government a 15 percent cut of the proceeds.
Huang insisted that the Trump administration was not involved in Nvidia’s talks with Intel, which, according to Huang, have been going on for nearly a year. “The Trump administration had no involvement in this partnership at all,” Huang said. “They would have been very supportive, of course. Today, I had the opportunity to tell Secretary [of Commerce, Howard] Lutnick and he was very excited and supportive of seeing American technology companies working together.”
Still, says Pat Moorhead, founder and principal analyst at Moor Insights & Strategy, “I do believe Nvidia scores points with the administration by making this investment.”
“The administration’s move to take a stake in the company definitely gives some momentum for Intel to attract more external investments, like the earlier investment from SoftBank, and today, NVIDIA,” says Ray Wang, research director for Semiconductors and emerging tech at the Futurum Group.
Wang also noted that the initial announcement of a partnership between Intel and Nvidia didn’t mention Intel’s Foundry Services, which offers the most advanced chip design and manufacturing opportunities to Intel customers. Nvidia largely relies on Taiwan Semiconductor Manufacturing Company for those services. (TSMC also manufactures some of Intel’s chips.)