Nvidia’s $5B Investment in Intel: A New Partnership in AI Chip Development
In an unexpected turn of events in the tech industry, AI titan Nvidia has declared a $5 billion investment in its struggling competitor, Intel. This investment is coupled with a partnership to co-develop advanced chips for data centers and PCs.
The investment, valued at $23.28 per share, catapults Nvidia to the position of one of Intel’s largest shareholders, with approximately 4% ownership. The collaboration aims at merging Nvidia’s AI prowess with Intel’s CPU technologies, leveraging Nvidia’s NVLink architecture.
Following this announcement, Intel shares skyrocketed by 22.8%, marking the company’s most successful trading day in nearly four decades. This partnership announcement comes on the heels of the U.S. government’s acquisition of a 10% stake in Intel for $8.9 billion, as part of the CHIPS Act initiative.
“This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs,” said Nvidia CEO Jensen Huang. Intel will manufacture custom x86 CPUs for Nvidia’s AI infrastructure platforms while also building PC chips that integrate Nvidia RTX GPU chiplets.
Analysts perceive this deal as a potential “game-changer” for Intel, which has been grappling to compete in the AI boom that has catapulted Nvidia to a staggering $4.2 trillion valuation.