Nvidia unveiled plans on Thursday to invest $5 billion in Intel and partner on the development of custom chips for data centers and PCs, a move that triggered a 23% rally in Intel.
The announcement sent Nvidia’s shares up 3%, lifting its market capitalization beyond $4 trillion. The gains provided a reprieve for Nvidia after a recent Chinese prohibition on its chips briefly rattled investors.
The deal will see Nvidia acquire approximately 215 million shares of Intel at $23.28 each. This strategic maneuver closely follows the Trump administration’s recent purchase of a 10% stake in Intel, underscoring the chipmaker’s crucial position in US technology policy as competition with China intensifies.
The US government’s $8.9 billion stake—announced weeks ago—was positioned as a safeguard for domestic semiconductor manufacturing, with President Trump simultaneously threatening 100% tariffs on chip imports and negotiating new export frameworks. Under these arrangements, Nvidia and AMD are permitted to sell lower-powered AI chips to China, but must surrender a 15% portion of resulting sales to the government, according to sources.
As outlined in the new collaboration, Intel will build bespoke x86 processors laser-focused on Nvidia’s artificial intelligence platforms—a move that could address persistent issues in CPU-GPU data transfer. For consumer computing, Intel is set to produce system-on-chip models featuring Nvidia’s RTX graphics architecture.
