Nvidia (NVDA.O) announced on Thursday that it will invest $5 billion in Intel (INTC.O), throwing its weight behind the struggling U.S. chipmaker just weeks after the White House engineered an extraordinary deal for the federal government to take a massive stake in Intel.
The investment instantly makes Nvidia one of Intel’s largest shareholders, giving it roughly 4% of the company after new shares are issued to complete the deal. The move triggered a 29% jump in Intel’s stock price, signaling investor confidence in the chip giant’s future. For Nvidia, whose chips power the global artificial intelligence boom, the deal strengthens its influence in both data centers and consumer markets.
Intel, once considered the flag bearer of the chip industry, has faced years of failed turnaround efforts. In March, the company appointed Lip-Bu Tan as CEO, but he quickly came under fire from U.S. officials including President Donald Trump who called for his resignation over concerns about his ties to China. That controversy led to a swiftly arranged meeting in Washington, which ended with Intel’s unusual arrangement to give the U.S. government a 10% stake.
A White House official clarified that the Trump administration was not involved in Nvidia’s investment, even though Nvidia CEO Jensen Huang was seen alongside Trump and other executives during the U.S. president’s state visit to the United Kingdom on Thursday.
The new pact between Nvidia and Intel includes plans to jointly develop PC and data center chips, but crucially, it does not extend to Intel’s foundry business making computing chips for Nvidia. Instead, Intel’s foundry division will supply central processors and advanced packaging for the joint products. Analysts note that Intel’s foundry will still need to win a large customer like Nvidia, Apple, Qualcomm, or Broadcom to ensure long-term survival.
Some experts see Nvidia’s move as a potential first step toward a deeper restructuring. “This may be the first step of an acquisition or breakup of the company (Intel) among U.S. chip makers though it is entirely possible the company will remain a shadow of its former self but will survive,” said Nancy Tengler, CEO of Laffer Tengler Investments.
Under the terms, Intel will design custom data-center CPUs that Nvidia will pair with its powerful GPUs. The two will connect through Nvidia’s proprietary high-speed link, giving Intel a chance to profit from each Nvidia AI server sold. “This is a massive game-changer for Intel and effectively resets its position of AI-laggard into a cog in future AI infrastructure,” said Gadjo Sevilla, senior AI and tech analyst at eMarketer.
The pact poses risks to rivals such as AMD and Taiwan’s TSMC, while also expanding options for consumer PCs. Nvidia will provide Intel with custom graphics chips that can be packaged with Intel CPUs, creating a new competitive front against AMD in desktops and laptops.
The companies did not reveal when their first joint products will launch, but confirmed that “multiple generations” of chips are already planned.
