NVIDIA Invests $5 Billion in Intel, Looks to Have Joint Chip Development

NVIDIA Corp. will invest $5 billion in Intel Corp. through a common stock purchase, while also committing to co-develop chips for personal computers and data centers, the two companies announced Thursday. The agreement marks one of the most surprising collaborations in the semiconductor industry, pairing rivals whose fortunes have diverged sharply in recent years.

Strategic Investment

NVIDIA will acquire Intel common stock at $23.28 per share, giving it a stake of less than 5% in the company. Intel’s shares surged as much as 26% in pre-market trading following the news. The investment comes amid broader efforts to stabilize Intel, which has faced market share losses, heavy capital expenditure requirements, and pressure to modernize its manufacturing capabilities.

The U.S. government recently took a near 10% stake in Intel, while Japan’s SoftBank Group committed $2 billion last month. Intel has also been raising capital through divestments.

Technology Collaboration

Under the new partnership, Intel will incorporate NVIDIA graphics technology into upcoming PC processors, strengthening its ability to compete with Advanced Micro Devices Inc.(AMD) in desktops and laptops. Conversely, Intel’s processors will be supplied for certain Nvidia data center systems, where general-purpose CPUs are needed alongside Nvidia’s AI accelerators.

NVIDIA CEO Jensen Huang described the alliance as a “fusion of two world-class platforms”, emphasizing the coupling of Nvidia’s AI and accelerated computing stack with Intel’s x86 architecture. Intel CEO Lip-Bu Tan highlighted the move as validation of Intel’s long-standing role in modern computing, pledging to continue innovation across its portfolio.

Industry Implications

The tie-up reflects a dramatic shift in the balance of power. Once the undisputed leader in computing hardware, Intel has struggled in recent years against NVIDIA’s dominance in AI chips and AMD’s gains in consumer markets. Nvidia, now valued at over $4 trillion, has seen revenue projections soar past $200 billion annually, while Intel’s market value stood at just $116 billion before the announcement.

Intel’s decision underscores its pragmatic pivot under new leadership, pursuing partnerships and an open foundry model after years of defending its vertically integrated strategy. The company continues to rely on Taiwan Semiconductor Manufacturing Co. (TSMC) for its most advanced products while working to regain manufacturing leadership by 2026.

Competitive Position

NVIDIA confirmed it remains committed to developing its own processors using technology from Arm Holdings Plc, meaning this partnership will not displace its in-house CPU roadmap. Meanwhile, the collaboration is expected to intensify competition with AMD across both PCs and data centers.

For Intel, the NVIDIA alliance represents both financial relief and access to market-leading technology. For Nvidia, it secures additional CPU supply for large-scale AI clusters while reinforcing its central role in shaping the next era of computing.