In a surprising twist, chip-making giants Nvidia and Intel have shaken hands on a major deal. They will work together to create fresh lines of computer chips and processors. This partnership targets the fast-growing areas of artificial intelligence (AI) and video games.
Nvidia isn’t just collaborating; they are putting serious money into their new partner. The company announced a whopping $5 billion investment in Intel. Nvidia plans to buy Intel shares to help boost Intel’s chip business.
According to a press release from Nvidia, this alliance means they will jointly develop products for data centers and personal computers. These new tools will speed up applications and tasks for both big businesses and everyday users. The agreement aims to combine Nvidia’s strengths in AI and powerful computing with Intel’s core CPU technologies and its popular x86 system. They plan to use Nvidia’s NVLink to connect their different chip designs smoothly. This should bring cutting-edge solutions to customers.
A Boost for Intel
Nvidia will pick up about a 4% stake in Intel. They will buy these shares at $23.28 each. This investment still needs approval from regulators. It comes at a key time for Intel, which has faced financial challenges. The company has struggled with strong competition and the shift toward AI and mobile devices.
Bloomberg reports this deal is a “lifeline” for Intel. The company recently received $9 billion from the U.S. government. Softbank also invested $2 billion. This new Nvidia funding adds to Intel’s financial recovery.
News of the deal sent Intel’s stock soaring. It jumped up to 28% in pre-market trading, Bloomberg noted. This surge pushed the value of the U.S. government’s 10% stake in Intel to $14 billion. As of this writing, Intel’s shares trade 28% higher at $31.90. Nvidia’s stock also rose 3.70% to $176.58, based on Google Finance data.
New Chips for AI and Gaming
The collaboration will focus on two main product lines: new x86 RTX SOC chips for personal computers and special x86 CPUs for data centers.
Intel will build Systems on a Chip (SOCs). These will mix Intel’s x86 CPUs with Nvidia’s RTX GPU chiplets. They will link up using NVLink technology. Tom’s Hardware newspaper explains that these chips are for the gaming market. They will target thin laptops and small desktop PCs. They will compete with similar products from AMD. Unlike Intel’s past project with AMD (Kaby Lake-G), these new chips will use NVLink for a more efficient connection and shared memory.
At the same time, Intel will also design and make custom x86 CPUs for Nvidia. Nvidia will use these in its AI infrastructure for large-scale enterprise clients. These custom CPUs will use NVLink Fusion technology for even faster communication with Nvidia’s powerful GPUs, as detailed by Tom’s Hardware.
Jensen Huang, Nvidia’s CEO, shared his excitement in the official statement. He said, “This historic collaboration brings together Nvidia’s accelerated computing and AI stack with Intel’s CPUs and the vast x86 ecosystem. Together, we will expand our ecosystems and build the foundation for the next age of computing.” Lip-Bu Tan, Intel’s CEO, added, “We appreciate the trust Jensen and the Nvidia team have shown in us with their investment. We look forward to working together to innovate for our customers and grow our business.”
AI Drives Tech Industry Changes
This partnership between Nvidia and Intel, two major players in the chip world, signals a big shift. It shows how the growing need for AI is changing the global tech landscape. Nvidia, already a leader in AI chips, wants to make its system even stronger. Intel uses this alliance to catch up with rivals like TSMC and AMD.
The collaboration is still in its early stages. Specific details like product specs or release dates have not been shared. It could take at least a year for these new processors to reach the market due to long development times.
This deal offers more than just financial help for Intel. It’s a joint effort to lead the next generation of AI and personal computing technologies. Both companies aim to solidify their key roles in a rapidly changing market. CEOs Jensen Huang and Lip-Bu Tan will provide more details in a virtual press conference today at 1 p.m. ET.