Nvidia Invests $5 Billion in Intel, Deepens CPU Collaboration While Evaluating Foundry Technology

By / / Breaking News

Key Takeaways

  • Nvidia (NVDA) has announced a significant $5 billion investment in Intel (INTC), becoming one of its largest shareholders, holding potentially 4% or more of the company.
  • The collaboration includes Intel designing custom data center central processors to be packaged with Nvidia's AI chips (GPUs), enhancing communication speeds between the two platforms.
  • Nvidia's CEO, Jensen Huang, confirmed the company is still evaluating Intel's foundry technology for future manufacturing, despite the current deal not involving Intel's contract manufacturing business for Nvidia's chips.
  • Intel's shares surged over 32% in premarket trading following the announcement, while Nvidia saw a more than 3% increase, signaling strong market approval for the strategic partnership.

Nvidia (NVDA) has made a substantial strategic move by investing $5 billion in rival chipmaker Intel (INTC), positioning itself as a major shareholder in the struggling U.S. chip foundry. This investment is part of a broader collaboration aimed at tightly integrating Nvidia's leading AI and accelerated computing stack with Intel's CPUs and the expansive x86 ecosystem.

The announced deal will see Intel design custom data center central processors, which Nvidia will then package with its high-demand AI GPUs. This integration is expected to facilitate higher-speed communication between the Intel and Nvidia chips, a critical differentiator in the rapidly evolving AI market where numerous chips must operate in unison to process vast amounts of data.

While the immediate deal does not involve Intel's foundry business manufacturing chips for Nvidia, Nvidia's CEO Jensen Huang has indicated that the company is actively evaluating Intel's foundry technology. Huang previously stated in May 2023 that Nvidia was "open to manufacturing with Intel" and had received positive test chip results for Intel's next-generation process, underscoring a potential future expansion of their manufacturing relationship.

This "historic collaboration" creates a formidable competitive challenge, particularly for Advanced Micro Devices (AMD), which competes with Intel in supplying chips to data centers and is developing its own AI servers. The market reacted positively to the news, with Intel's shares surging over 32% in premarket trading, and Nvidia's stock also climbing more than 3%. Nvidia is set to become one of Intel's largest shareholders, likely owning 4% or more of the company after new shares are issued.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
Scroll to Top