Nvidia is making a rare bet on a competitor, investing $5 billion in Intel and agreeing to collaborate on new chip designs for both PCs and data centers. The move gives Nvidia a stake of around 4% in Intel, instantly making it one of the company’s largest shareholders.
The deal comes at a turning point for Intel, which has struggled to regain momentum after years of delays and market share losses. Its shares surged in early trading following the announcement, as investors saw Nvidia’s backing as a vote of confidence in the chipmaker’s turnaround efforts.
As part of the agreement, Intel will design custom central processors to be paired with Nvidia’s graphics units, with a focus on improving communication speeds between the chips, a critical factor in artificial intelligence computing. The two companies also plan to bring similar solutions to the consumer PC market, where Intel will bundle its CPUs with Nvidia graphics.
The alliance could have far-reaching consequences for the semiconductor industry. AMD, which competes with both companies in data center and PC chips, fell in trading on concerns of intensified rivalry. TSMC, Nvidia’s longtime manufacturing partner, also slipped as speculation grew that some future production could shift to Intel.
For Nvidia, the financial return may be secondary to the political benefits. The company has faced increasing pressure over sales to China, while Intel has recently received billions in support from Washington. By partnering with Intel, Nvidia signals alignment with U.S. industrial policy at a time when supply chains and technology leadership are under scrutiny.
Intel’s new CEO, Lip-Bu Tan, has pledged to streamline operations and only build out new capacity where demand is clear. The Nvidia partnership could accelerate that strategy, giving Intel a path to reestablish itself in the AI era.
While neither company gave a launch date for joint products, executives said the collaboration will span multiple generations of chips. If successful, it could reshape the competitive balance in a sector that sits at the heart of both the digital economy and global geopolitics.
