Nvidia, the world’s leading chipmaker, announced on Thursday that it’s investing $5 billion in Intel and will collaborate with the struggling semiconductor company.<\/p>\n
Nvidia said it will spend $5 billion to buy Intel common stock at $23.28 a share. The investment, which is subject to regulatory approvals, comes a month after the U.S. government took a 10% stake in Intel. <\/p>\n
Nvidia CEO Jensen Huang called it \u201ca fusion of two world-class platforms\u201d that combines Intel’s strength in making conventional computer chips, known as CPUs, that power most laptops, with Nvidia’s focus on the specialized graphics chips that are critical for artificial intelligence. <\/p>\n
\u201cThis partnership is a recognition that computing has fundamentally changed,\u201d Huang told reporters Thursday. \u201cThe era of accelerated and AI computing has arrived.\u201d<\/p>\n
Intel shares jumped nearly 23%, its biggest one-day percentage gain since 1987. Nvidia shares added more than 3%.<\/p>\n
For data centers, Intel will make custom chips that Nvidia will use in its AI infrastructure platforms. For personal computer products, Intel will build chips that integrate Nvidia technology.<\/p>\n
The agreement provides a lifeline for Intel, which was a Silicon Valley pioneer that enjoyed decades of growth as its processors powered the personal computer boom, but fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone\u2019s 2007 debut. <\/p>\n
Intel fell even farther behind in recent years amid the AI boom that’s propelled Nvidia into the world’s most valuable company. Intel lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, and expects to slash its workforce by a quarter by the end of 2025.<\/p>\n
U.S. President Donald Trump’s administration stepped in last month to secure a 10% stake \u2014 433.3 million shares of non-voting stock priced at $20.47 apiece \u2014 making it one of Intel\u2019s biggest shareholders. Federal officials said they invested in Intel in order to bolster U.S. technology and domestic manufacturing.<\/p>\n
Of Nvidia\u2019s own Intel stake, Huang said \u201cthe Trump administration had no involvement in this partnership at all,\u201d though \u201cwould have been very supportive, of course.\u201d<\/p>\n
Intel’s stock price surge Thursday pushed the total value of the U.S. government\u2019s stake in Intel to $13.2 billion, a $2.5 billion increase from before Nvidia’s announcement.<\/p>\n
Huang said Nvidia has been in talks with Intel for about a year. Intel CEO Lip-Bu Tan, who joined the press call with Huang on Thursday, said he’s been talking to Nvidia since he was named Intel’s new leader in March. <\/p>\n
\u201cThis is a very big, important milestone,\u201d Tan said. \u201cI call it a game-changing opportunity that we can work together.\u201d<\/p>\n
The deal is \u201cbullish for U.S. tech,\u201d Wedbush Securities analyst Daniel Ives said in a client note.<\/p>\n
Ives said it brings Intel \u201cfront and center into the AI game\u201d and, combined with the U.S. government stake, adds to “a golden few weeks for Intel after years of pain and frustration for investors.\u201d<\/p>\n
Nvidia, meanwhile, has soared because its specialized chips are underpinning the AI boom. The chips, known as graphics processing units, or GPUs, are highly effective at developing powerful AI systems.<\/p>\n
Left out of the celebration Thursday was another U.S. chipmaking rival, Advanced Micro Devices. Shares in the leading maker of both GPUs and CPUs dropped slightly Thursday. AMD, Intel and Nvidia are all headquartered in Santa Clara, California. <\/p>\n
The deal between Nvidia and Intel comes as China moves to be less dependent on U.S. semiconductor technology. This week, Chinese officials reportedly forbade several large domestic technology companies from purchasing Nvidia chips, and China-based Huawei announced that it was expanding its development of AI chips and manufacturing.<\/p>\n
While Nvidia and Intel will work together to develop new chips, a manufacturing deal has yet to be struck between the two. The potential access to Intel’s chip foundries by Nvidia poses a risk to Taiwan Semiconductor Manufacturing Company, which currently manufactures the tech giant’s flagship processors. Huang emphasized Thursday that both his company and Intel remain \u201cvery successful customers\u201d of TSMC.<\/p>\n
Huang has been in Britain on a visit that coincides with Trump\u2019s trip to the country, and he has been attending events with the president along with other Silicon Valley bigwigs.<\/p>\n
At a signing ceremony for a trans-Atlantic tech partnership on Thursday with British Prime Minister Keir Starmer, Trump mused that AI was \u201ctaking over the world.\u201d<\/p>\n
\u201cI\u2019m looking at you guys. You\u2019re taking over the world, Jensen,\u201d Trump said.<\/p>\n
Huang and Trump also both attended a royal banquet, prompting the tech mogul to dish about the Windsor Castle event to Intel’s CEO in the seconds before their press event.<\/p>\n
\u201cThe cognac was excellent, but just not enough of it,\u201d Huang told Tan. \u201cI guess the cognac was from 1912.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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