NVIDIA buys $5B Intel stake to forge chip manufacturing partnership

NVIDIA has agreed to purchase $5 billion worth of Intel stock at $23.28 per share, making it a major shareholder in the struggling chipmaker just weeks after the U.S. government acquired a 10% stake. The strategic investment will create a new partnership where Intel manufactures NVIDIA chips while incorporating NVIDIA’s RTX GPU chiplets into its own PC processors, potentially reshaping the competitive dynamics in both AI infrastructure and consumer computing markets.

What you should know: The deal creates a mutually beneficial manufacturing and technology partnership between the two chip giants.

• Intel will build NVIDIA-custom x86 CPUs that NVIDIA will integrate into its AI infrastructure platforms and sell to customers.
• In return, Intel will produce and market x86 system-on-chips that incorporate NVIDIA RTX GPU chiplets to power a wide range of PCs.
• Intel shares jumped 24% to around $31 following the announcement, significantly above NVIDIA’s purchase price of $23.28 per share.

The big picture: This partnership comes as Intel faces significant financial pressures and seeks to leverage its manufacturing capabilities while NVIDIA looks to expand beyond its AI chip dominance.

• Intel is currently cutting 15% to 20% of its global factory workforce due to financial pressures.
• The U.S. government recently invested $8.9 billion for a 10% stake in Intel, calling it a “great American company.”
• With Intel shares now trading around $31, the government’s stake is valued at approximately $13.4 billion.

What they’re saying: Both CEOs emphasized the strategic value of combining their respective strengths.

• “This historic collaboration 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,” said NVIDIA founder and CEO Jensen Huang.
• “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,” said Intel CEO Lip-Bu Tan.

Why this matters: The partnership could help Intel stabilize its business while giving NVIDIA access to advanced manufacturing capabilities and the massive x86 ecosystem, potentially accelerating AI adoption across consumer and enterprise markets.