Nvidia corporation (NVDA) is joining the US government in purchasing a $5 billion stake in semiconductor giant Intel (INTC). The Thursday announcement sent INTC shares skyrocketing by 30% during today’s stock trading session. Nvidia said Thursday in a press release that it will invest $5 billion in Intel’s common stock, pending regulatory approval.
Per a Nvidia press release on Thursday, the companies will focus on seamlessly connecting NVIDIA and Intel architectures using NVIDIA NVLink — integrating the strengths of NVIDIA’s AI and accelerated computing with Intel’s leading CPU technologies and x86 ecosystem to deliver cutting-edge solutions for customers. Nvidia’s stake purchase would represent a roughly 4% stake in Intel, and bring recent outside investment in the latter to $16 billion. Indeed, the Trump administration was reportedly in talks with TSMC and Intel to split up the company and hand over Intel’s manufacturing business to its Taiwanese counterpart. While that deal never materialized, the US government drew attention for its unusual move to take a 10% stake in Intel this summer.
Nvidia, Intel CEO’s React to New Stake Deal
“AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software. At the heart of this reinvention is NVIDIA’s CUDA architecture,” said NVIDIA founder and CEO Jensen Huang. “This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
“Intel’s x86 architecture has been foundational to modern computing for decades — and we are innovating across our portfolio to enable the workloads of the future,” said Lip-Bu Tan, CEO of Intel. “Intel’s leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable new breakthroughs for the industry. We appreciate the confidence Jensen and the NVIDIA team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business.”
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While Intel stock got a huge bump on Thursday, NVDA shares are only up 3.25%. Wall Street analysts have reacted positively to the news and backed both semiconductor stocks. “This is a game-changer deal for Intel as it now brings them front and center into the AI game,” Wedbush analyst Dan Ives wrote in a note to investors Thursday.
