Nvidia announced a $5 billion investment in Intel last week, marking a major shift in the relationship between the longtime chip rivals. This investment follows recent capital infusions into Intel, including an $8.9 billion stake from the U.S. government and $2 billion from SoftBank.
The partnership centers on two key products. First, Intel will build custom x86 CPUs for Nvidia’s AI systems. Second, Intel will create and sell PC chips that include Nvidia’s RTX graphics technology. Both companies will use Nvidia’s NVLink technology to connect their systems, providing faster data transfer than standard connections.
“AI is powering a new industrial revolution,” said Nvidia CEO Jensen Huang. “This historic collaboration tightly couples Nvidia’s AI stack with Intel’s CPUs and the vast x86 ecosystem.”
The deal gives Nvidia roughly 4% ownership of Intel. Market reaction was immediate, with Intel’s stock jumping 23% after the announcement, raising its market value to $143 billion. Nvidia shares also climbed 3.5%.
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Intel CEO Lip-Bu Tan embraced the partnership: “Intel’s x86 architecture has been foundational to modern computing for decades. Our platforms will complement Nvidia’s AI leadership.”
Importantly, the deal doesn’t include Nvidia using Intel’s chip-making factories. Intel’s manufacturing business has struggled with losses, reporting $13 billion in losses for 2024. However, the companies haven’t ruled out future manufacturing partnerships.
The collaboration addresses a market worth about $50 billion across data centers and personal computing. For Intel, this partnership offers a path back to relevance in the AI revolution. For Nvidia, valued at over $4.2 trillion, it provides access to Intel’s massive PC market presence.
The contrast between the companies’ fortunes is stark. Intel shares have fallen nearly 32% over five years, while Nvidia stock has skyrocketed by over 1,300%, fueled by explosive demand for AI chips.
Before the partnership becomes official, it needs regulatory approval under antitrust laws. Neither company has shared when their first joint products might reach customers.
This deal represents a major industry realignment. Intel shifts from competing directly in AI to leveraging its widespread x86 ecosystem, while Nvidia extends its influence into PCs through Intel’s vast distribution network.
Jensen Huang and Lip-Bu Tan have known each other for 30 years, with Huang calling the investment “an incredible” opportunity. Industry analysts describe the partnership as a “game-changer” that brings Intel “front and center into the AI game” after years of falling behind.
