TLDR
- Nvidia invests $5 billion in Intel at $23.28 per share, making it one of Intel’s largest shareholders with roughly 4% ownership
- The companies will jointly develop PC and data center chips with faster communication speeds between processors
- Intel shares jumped 28% following the announcement while Nvidia rose 3%
- The deal follows the U.S. government’s $8.9 billion investment for a 10% stake in Intel last month
- Partnership excludes Intel’s struggling foundry business, which has failed to secure major external customers
Nvidia announced Thursday it will invest $5 billion in Intel through a strategic partnership focused on developing next-generation computing products. The deal makes Nvidia one of Intel’s largest shareholders with approximately 4% ownership after new shares are issued.
Excited to team up with my good friend Jensen to jointly develop multiple generations of custom data center and PC products!
Our collaboration brings together the best of @Intel and @nvidia to benefit customers – and shows how vital x86 architecture and NVLink will be in… pic.twitter.com/lnEtmJW73A
— Lip-Bu Tan (@LipBuTan1) September 18, 2025
Intel shares surged 28% to $31.80 following the announcement. Nvidia stock rose 3% as investors welcomed the collaboration between two major chip companies.
The investment comes at $23.28 per share, slightly below Intel’s Wednesday closing price of $24.90. This price is higher than the $20.47 per share the U.S. government paid for its 10% Intel stake last month.
Joint Product Development
Under the partnership terms, Intel will design custom central processing units for Nvidia’s artificial intelligence infrastructure platforms. The companies plan to create “multiple generations” of data center and PC products with enhanced performance capabilities.
The collaboration centers on proprietary Nvidia technology that enables faster communication between Intel and Nvidia chips. These high-speed connections are crucial in AI applications where multiple processors must work together to process large data sets.
Currently, Nvidia’s AI servers with these advanced connections only use Nvidia’s own chips. The Intel partnership puts the company on equal footing to compete for server market share.
For consumer markets, Nvidia will provide Intel with custom graphics chips. These will be packaged with Intel’s PC processors using the same high-speed connection technology.
The deal specifically excludes Intel’s contract manufacturing or foundry business. Most analysts believe Intel’s foundry needs major customers like Nvidia, Apple, or Qualcomm to remain viable long-term.
Government Investment Context
The partnership follows the Trump administration’s $8.9 billion investment in Intel last month. That deal gave the U.S. government a 10% stake, making it Intel’s largest shareholder.
President Trump had called for Intel CEO Lip-Bu Tan’s resignation due to concerns about his China connections. Tan was appointed CEO in March after years of failed turnaround efforts at the company.
Intel has accumulated substantial capital recently, including $2 billion from Softbank and $5.7 billion from the U.S. government. Chief Financial Officer David Zinsner said the company maintains a “good cash position” for future investments.
Market Impact
The announcement affects several competitors in the chip industry. AMD shares dropped nearly 4% as the company competes with Intel in data center processors and develops its own AI servers.
Taiwan’s TSMC shares fell 2% in U.S. trading. TSMC currently manufactures Nvidia’s flagship processors, business that could potentially shift to Intel under the new partnership.
Product Timeline
Neither company disclosed specific financial terms for their technical collaboration beyond the $5 billion equity investment. They described the arrangement as commercial, with no licensing components involved.
The companies declined to provide launch dates for their first joint products. Both stated their existing product roadmaps remain unchanged despite the new partnership.
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