Nvidia to invest five billion dollars in Intel as firms announce new partnership

Nvidia, the world’s leading chipmaker, announced it is investing five billion dollars in Intel and will collaborate with the struggling semiconductor company.

The two companies will team up to work on custom data centres that form the backbone of artificial intelligence infrastructure as well as personal computer products, Nvidia said in a press release.

Nvidia said it will spend five billion dollars (£3.6 billion) to buy Intel common stock at 23.28 dollars a share.

The investment, which is subject to regulatory approvals, comes a month after the US government took a 10% stake in Intel.

“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,” Nvidia chief executive Jensen Huang said.

“Together, we will expand our ecosystems and lay the foundation for the next era of computing.”

The two companies said they will work on “seamlessly connecting” their architectures.

For data centres, Intel will make custom chips that Nvidia will use in its AI infrastructure platforms.

While for PC products, Intel will build chips that integrate Nvidia technology.

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’s 2007 debut.

Intel fell even further behind in recent years amid the artificial intelligence boom that has propelled Nvidia into the world’s most valuable company.

Intel lost nearly 19 billion dollars (£13.9 billion) last year and another 3.7 billion dollars (£2.7 billion) in the first six months of this year, and expects to slash its workforce by a quarter by the end of 2025.

The US government stepped in last month to secure a 10% stake, making it one of Intel’s biggest shareholders.

US President Donald Trump made the announcement weeks after he initially criticised the company’s chief executive as a conflicted leader unfit for the job.

Chief executive Lip-Bu Tan and Mr Trump later reconciled after meeting in person.

Nvidia, meanwhile, has soared because its specialised chips are underpinning the artificial intelligence boom.

The chips, known as graphics processing units, or GPUs, are highly effective at developing powerful AI systems.

The deal between the two chipmakers comes as China moves to be less dependent on US semiconductor technology.

This week, Chinese officials reportedly forbade several large domestic technology companies from purchasing Nvidia chips, and Huawei announced that it was expanding its development of AI chips and manufacturing.

In premarket trading, Intel shares jumped 30%, while Nvidia shares added 3%.