Nvidia to Invest $5 Billion in Intel to Boost AI Chip Development

As per Reuters, Nvidia announced that it will invest $5 billion in Intel through the purchase of common stock at $23.28 per share. As per the reports, once completed, Nvidia will hold about 4% of Intel’s shares, making it one of the company’s largest investors.

Joint Chip Development

The agreement includes plans to develop multiple generations of chips for both data centres and personal computers. Intel will design custom x86 CPUs for Nvidia’s AI platforms, while also producing system-on-chips that combine its CPUs with Nvidia RTX GPU chiplets for high-performance consumer systems.

Leadership Remarks

Nvidia founder and CEO Jensen Huang said the collaboration links Nvidia’s AI and accelerated computing stack with Intel’s established x86 ecosystem. Intel CEO Lip-Bu Tan called the partnership an extension of Intel’s role in computing and said the investment shows Nvidia’s confidence in Intel’s portfolio.

US Government and Market Context

The announcement comes 2 weeks after the US government purchased a 10% stake in Intel as part of plans to boost domestic semiconductor production. Officials clarified that the government was not involved in Nvidia’s deal. Intel has also recently received $2 billion from SoftBank and $5.7 billion from the US government, adding to its cash reserves.

Intel has been undergoing a turnaround under CEO Lip-Bu Tan, appointed in March. For Nvidia, the deal comes as it faces difficulties in China with restrictions on advanced chip sales.

Read more: Nvidia Starts Supply Of New AI Chips To Tata Communications, Jio Platforms!

Conclusion

The partnership provides Intel with new capital and aligns Nvidia with a major US chipmaker. The two firms plan to develop future chips together for data centres and PCs.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.