In brief
- Nvidia invested $5 billion in Intel and agreed to co-develop custom chips for PCs and data centers.
- Jensen Huang framed the deal as coupling Nvidia’s accelerated computing with Intel’s x86 platforms.
- The move followed reports that China banned local tech firms from buying Nvidia AI chips.
Nvidia announced Thursday it would invest $5 billion in Intel and collaborate on custom chips for data centers and personal computers, sending Intel’s battered stock soaring 23% in early trading.
The investment, which would buy Nvidia roughly 215 million Intel shares at $23.28 each, comes just weeks after the Trump administration took a 10% stake in the struggling chipmaker.
As per the agreement, Intel will develop custom x86 CPUs optimized for Nvidia’s AI platforms, potentially solving longstanding bottlenecks in CPU-GPU communication. For personal computers, Intel will build system-on-chip designs incorporating Nvidia’s RTX graphics technology.
“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 CEO Jensen Huang said in the announcement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
Nvidia shares climbed 3%, pushing the company’s market value past $4 trillion, giving the company a breath of fresh air after the quick panic caused by a decision from China to ban its chips.
The deal throws Intel a lifeline at a critical moment. The company that once dominated Silicon Valley lost nearly $19 billion last year and another $3.7 billion in the first half of 2025. It plans to cut 25% of its workforce by year’s end
However, this is not just a lifeline, and the partnership is actually mutually beneficial. For Nvidia, it means deeper access to the x86 architecture that still powers most enterprise systems. For Intel, it’s a chance to leverage Nvidia’s AI dominance to stay relevant.
By teaming up, Intel can use Nvidia’s powerful AI technology in its own computer chips. This means businesses and regular people will get faster, “smarter” computers from Intel, all thanks to Nvidia’s know-how, keeping Intel a major player even as technology rapidly change
Pop The Champagne, Intel
“Pop the champagne,” Dan Ives, tech analyst at Wedbush Securities, told Bloomberg. “It brings Intel into the AI game. This is also gonna viewed very positively in DC” he said
The Trump administration’s earlier intervention had already signaled Intel’s strategic importance. The government’s $8.9 billion investment for a 10% stake was part of broader efforts to secure domestic chip production amid tensions with China. Trump has threatened 100% tariffs on imported chips while negotiating export deals that let Nvidia and AMD sell lower-power AI chips to China in exchange for a 15% cut of sales.
Trump’s efforts to limit the exports of good chips to China and only give licenses to sell nerfed chips finally ended up in a decision from China to ban the use of Nvidia chips (good or bad) and promote the use of domestic alternatives.
Intel CEO Lip-Bu Tan, who took over in March 2025 with a mandate to restore the company’s manufacturing edge, framed the Nvidia partnership as validation of Intel’s core strengths. “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,” he said in the official announcement.
Market watchers see the deal as confirmation of Nvidia’s position atop the chip industry. The company reported $46.7 billion in quarterly revenue in Q2 2025, up 56% from a year earlier.
“With AI infrastructure investments continuing to grow with the company expecting between $3 trillion to $4 trillion in total AI infrastructure spend by the end of the decade, the chip landscape remains [Nvidia’s] world, with everybody else paying rent,” Ives wrote in a client note according to The Guardian.
The partnership puts pressure on AMD, which now faces a combined Intel-Nvidia force in both AI and PC markets. It also reinforces the push to build American chip capacity as global supply chains remain fragile.
The deal requires regulatory approval. Neither company disclosed a timeline for when the first jointly developed products would reach the market.
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