In a surprising twist for the tech world, NVIDIA, a leader in AI chips, announced a significant investment in Intel. The company is putting $5 billion into its rival. This deal goes beyond just money; it’s a plan for the two giants to develop new chips together. These new chips will power both data centers and personal computers.
The announcement quickly grabbed Wall Street’s attention. Intel’s stock soared by 22.8%, closing at $30.57. NVIDIA also saw its shares climb 3.54%. This agreement follows recent support for Intel. The US government invested in the chipmaker just last month.
An Unlikely Alliance for Future Chips
At its heart, this partnership aims to combine the strengths of both companies. NVIDIA plans to bring its AI and accelerated computing skills to the table. They will join forces with Intel’s well-known CPU technology and x86 system. Together, they hope to create advanced solutions for tech users.
Jensen Huang, NVIDIA’s CEO, shared his view on the partnership. He said the companies will link their systems with NVIDIA NVLink. For big data centers, Intel will make custom x86 CPUs for NVIDIA. NVIDIA will then use these chips in its AI platforms. They will then offer these to the market. For personal computers, Intel will build something new. They will create “x86 RTX SOCs.” These chips will mix Intel’s x86 processors with NVIDIA’s RTX GPU chiplets. This will boost PCs needing top CPU and GPU performance.
Lip-Bu Tan, identified as Intel’s CEO, also spoke positively about the deal. He noted that Intel’s x86 architecture has been central to modern computing for many years. He believes teaming up with NVIDIA will bring new progress to the industry, especially in AI. Tan expressed thanks for the trust NVIDIA showed with its investment. He looks forward to building new things for customers and expanding their businesses together.
Intel’s Road to Recovery
NVIDIA’s investment adds another layer to Intel’s recent recovery efforts. Earlier this year, Intel’s stock was at its lowest in over a decade. However, the company received a boost in August. The US government, under the Trump administration, agreed to invest 10% then. Japanese firm Softbank also put $2 billion into Intel that same month.
Kush Desai, the White House Deputy Press Secretary, praised this team-up. He called it “a significant step for American high-tech manufacturing.” Yet, a high-ranking White House official made it clear. The government was not involved in this particular agreement between NVIDIA and Intel.
Chris Caso from Wolfe Research voiced some questions. He wondered if this was “just a symbolic partnership for political purposes.” Or, he asked, was it “the beginning of a broader collaboration that will significantly benefit INTC?”
Lingering Questions and Global Talks
The investment still needs approval from government regulators. Also, it’s unclear if Intel factories will make NVIDIA’s chips. There are open questions about NVIDIA building its own dedicated US chip plants. And if Intel’s facilities would produce for NVIDIA after that.
Meanwhile, NVIDIA is also managing other global business issues. The company is talking with both the US and Chinese governments. They seek approval to sell their powerful chips in China.