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Nvidia Invests USD 5 Billion in Intel, Forges Chip Partnership

  • Sep 19, 2025
  • 3 min read

Nvidia announced on Thursday a USD 5 billion investment in Intel, alongside a strategic partnership to jointly develop PC and data centre chips. This move offers a critical lifeline to the struggling chipmaker, sending its shares soaring by 23%.


NVIDIA sign under a geometric, lattice-like roof structure with greenery and concrete walls, creating a modern, architectural setting.
Credit: NVIDIA

The investment makes Nvidia one of Intel’s largest shareholders, securing approximately 4% of the company after new shares are issued. This support follows years of unsuccessful turnaround efforts for Intel.


Nvidia will pay USD 23.28 per share for Intel common stock. This price is slightly below Wednesday’s closing price of USD 24.90 but higher than the USD 20.47 paid by the U.S. government. Nvidia shares increased by 3.8% on Thursday.


The new pact specifically involves the joint development of PC and data centre chips. Crucially, Intel’s contract manufacturing business, known as its foundry, will not produce computing chips for Nvidia.


However, Intel’s foundry will supply central processors and advanced packaging for the joint products. Jensen Huang, Nvidia Chief Executive Officer, stated on a call Thursday that his company continues to evaluate Intel’s foundry technology, having collaborated with the rival for nearly a year.


Intel appointed Lip-Bu Tan as Chief Executive Officer in March. President Donald Trump later called for Tan’s resignation due to concerns regarding his connections with China, prompting a swiftly arranged meeting in Washington.


This meeting concluded with Intel’s unusual agreement to provide the U.S. with a 10% stake in the company. This latest deal boosts Intel’s capital reserves, which already include a USD 2 billion investment from Softbank and a USD 5.7 billion investment from the U.S. government.


Chief Executive Officer Huang confirmed the Trump administration was not involved in the partnership deal but would have been supportive. Huang was observed with President Trump and other business leaders during the U.S. president’s state visit to the United Kingdom on Thursday.


Analysts widely believe Intel’s foundry requires a major client, such as Nvidia, Apple, Qualcomm, or Broadcom, for its survival. Nancy Tengler, Chief Executive Officer of Laffer Tengler Investments, noted this might be an initial step towards an acquisition or breakup of Intel.


Gadjo Sevilla, senior artificial intelligence and tech analyst at eMarketer, described the pact as a “massive game-changer” for Intel. He added that it effectively resets Intel’s position from an artificial intelligence laggard to a vital component in future artificial intelligence infrastructure.


The agreement presents a potential risk to Taiwan’s TSMC, which currently manufactures Nvidia’s flagship processors. Additionally, AMD, a competitor to Intel in supplying chips to data centres, also stands to lose.


AMD shares fell 1.3%, and Broadcom shares decreased 0.5%. David Wagner, portfolio manager at Aptus Capital Advisors, suggested TSMC might face a greater long-term risk than AMD.


Under the deal’s terms, Intel will design custom data-centre central processors. Nvidia plans to package these processors with its artificial intelligence chips, known as graphics processing units, or GPUs.


Circuit board with a central chip displaying the Nvidia logo. The board has gold and black detailing with a high-tech appearance.
Credit: NVIDIA

A proprietary Nvidia technology will enable Intel and Nvidia chips to communicate at higher speeds. Speedy links are crucial in the artificial intelligence market because many chips must be linked together to process immense data volumes.


Currently, Nvidia’s top-selling artificial intelligence servers featuring these links are only available using Nvidia’s own chips. This agreement could put Intel on par, allowing it to earn revenue from each Nvidia server.


The combined Nvidia-Intel chips could also challenge Broadcom, which possesses chip-to-chip connection technology and assists companies like Alphabet’s Google in developing artificial intelligence chips.


The companies did not disclose the financial terms of their collaboration nor when the first joint products would reach the market. They stated their product plans prior to the deal remain unchanged.

  • Nvidia invested USD 5 billion in Intel and formed a partnership to jointly develop PC and data centre chips.

  • The deal makes Nvidia one of Intel’s largest shareholders and caused Intel’s shares to rise by 23%.

  • The collaboration involves Intel designing custom data-centre central processors for Nvidia’s artificial intelligence chips.


Source: REUTERS

 
 
 

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