Intel shares surged more than 30% Thursday after Nvidia said it will invest $5 billion in the struggling U.S. chipmaker and jointly develop data center and PC processors, a move that could reshape the competitive landscape of the semiconductor industry. Nvidia's stake will be purchased at $23.28 a share, making it one of Intel's largest shareholders, likely with more than 4% ownership once new shares are issued.
Nvidia CEO Jensen Huang called the collaboration "historic," saying it "tightly couples NVIDIA's AI and accelerated computing stack with Intel's CPUs and the vast x86 ecosystem-a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing."
The partnership marks a major boost for Intel, which has struggled to regain footing after years of market share losses to Taiwan Semiconductor Manufacturing Co. and AMD. Intel's stock, which hit its lowest point in more than a decade earlier this year, has rallied since the U.S. government and SoftBank invested a combined $12 billion for stakes in the company over the summer.
Intel CEO Lip-Bu Tan said the deal represents a turning point. "Intel's x86 architecture has been foundational to modern computing for decades - and we are innovating across our portfolio to enable the workloads of the future," he said. "Intel's leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement Nvidia's AI and accelerated computing leadership to enable new breakthroughs for the industry."
Under the agreement, Intel will design custom x86 data center CPUs for Nvidia that will connect to Nvidia GPUs using its proprietary NVLink interface, offering up to 14 times the bandwidth of traditional PCIe connections. Nvidia will also provide Intel with custom RTX graphics chiplets to integrate into its PC processors, a move that could put Intel on equal footing with AMD's gaming-focused APUs.
Shares of Nvidia rose about 3% in premarket trading as investors welcomed the deal, which analysts said could accelerate adoption of Nvidia's AI servers and give Intel a revenue boost from every Nvidia system sold.
While the agreement does not currently include manufacturing Nvidia chips in Intel's foundries, industry analysts say the partnership could pave the way for Intel to eventually win business away from TSMC, which currently produces Nvidia's flagship AI processors.
The companies said they plan to develop "multiple generations" of joint products, with a timeline for first releases to be disclosed later. Nvidia stressed that it remains committed to its Arm-based Grace CPUs and other internal roadmaps, describing the Intel partnership as additive.
The deal is subject to regulatory approval. Huang and Tan are scheduled to host a joint press conference later Thursday to provide more details.
