In a landmark move set to reshape the landscape of artificial intelligence and personal computing, Nvidia has announced a \$5 billion investment in Intel, accompanied by a collaborative partnership between the two tech giants. The collaboration aims to develop cutting-edge solutions for AI infrastructure and PC development, marking a significant fusion of Nvidia's AI and accelerated computing capabilities with Intel's CPU technologies and x86 ecosystem.
Nvidia's \$5 billion investment will be in the form of purchasing Intel common stock at \$23.28 per share. This investment, subject to regulatory approvals, will make Nvidia one of Intel's largest shareholders, holding approximately 4% of the company. The partnership arrives a month after the U.S. government secured a 10% stake in Intel.
The collaboration will focus on developing custom data centers that form the backbone of AI infrastructure, as well as personal computer products. For data centers, Intel will design and manufacture custom x86 CPUs tailored for Nvidia's AI infrastructure platforms. These CPUs will incorporate Nvidia's NVLink technology to seamlessly connect Nvidia and Intel architectures. For personal computing, Intel will build x86 system-on-chips (SOCs) that integrate Nvidia RTX GPU chiplets. These "x86 RTX SOCs" will power a wide range of PCs, catering to the demand for integrated CPUs and GPUs.
Jensen Huang, Nvidia's CEO, hailed the collaboration as a "historic" fusion of two world-class platforms. He emphasized that the partnership would expand their ecosystems and lay the foundation for the next era of computing. Intel CEO Lip-Bu Tan echoed this sentiment, expressing excitement for the partnership and its potential benefits for both companies and the tech industry.
The agreement provides a crucial lifeline for Intel, a Silicon Valley pioneer that had experienced a decline after missing the shift to mobile computing and falling behind in the AI boom. Intel faced substantial financial losses in recent years and expects to reduce its workforce significantly by the end of 2025. Nvidia's investment and collaboration offer Intel a chance to revitalize its business and regain its footing in the AI era.
The partnership has significant implications for the broader tech industry. It brings together two leading companies with complementary strengths, potentially accelerating innovation in AI and PC technology. The collaboration could also intensify competition in the CPU and GPU markets, particularly with AMD. News of the deal caused Intel shares to jump by 25%, while Nvidia shares also saw a rise.
This collaboration arrives as China aims to reduce its reliance on U.S. semiconductor technology. Recently, Chinese officials have reportedly restricted several large domestic technology companies from purchasing Nvidia chips, and Huawei has announced plans to expand its development and manufacturing of AI chips.
Nvidia's collaboration with Intel extends beyond this investment. Nvidia is also scaling up AI infrastructure in the UK, with potential investments of up to £11 billion in data centers. This initiative involves partnerships with companies like CoreWeave, Microsoft, and Nscale to build AI factories with Nvidia Blackwell Ultra GPUs.
The partnership between Nvidia and Intel represents a significant strategic move with the potential to reshape the future of AI and personal computing. By combining their expertise and resources, the two companies aim to drive innovation and deliver cutting-edge solutions to customers worldwide.
