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Nvidia has announced a $5 billion investment in its rival Intel, forging a strategic partnership to develop advanced chips for personal computers and data centres amid growing US geopolitical efforts to strengthen domestic semiconductor industry.
Nvidia has announced a $5 billion investment in its longstanding rival Intel, acquiring approximately a 4% stake by purchasing shares at $23.28 each. This strategic move is part of a newly formed partnership focused on the joint development of advanced chips for personal computers and data centres. Nvidia’s chief executive, Jensen Huang, described the collaboration as “historic,” aiming to combine Nvidia’s industry-leading graphics processing units (GPUs), which dominate the artificial intelligence (AI) infrastructure sector, with Intel’s general-purpose central processing units (CPUs).
This announcement comes shortly after the US government took a 10% equity stake in Intel, reflecting a broader effort by the Trump administration to strengthen the future of American semiconductor manufacturing in the face of global supply chain challenges and increasing geopolitical tensions surrounding chip production.
The partnership promises to enhance Intel’s chip development capabilities, particularly progressing towards Intel’s critical 14A manufacturing process, targeted for completion by 2027. According to industry analysts, the collaboration’s integration of Nvidia’s AI and graphics technology with Intel’s CPU architecture, connected via Nvidia’s high-speed NVLink interconnect, could give Intel a technological edge against competitors such as AMD, which currently lacks similarly close integration with Nvidia’s components.
Beyond the data centre and AI infrastructure angle, the companies intend to jointly develop custom chips for PCs as well. Intel is expected to manufacture custom x86 system-on-chips (SoCs) featuring Nvidia’s RTX GPU chiplets. This represents a significant collaboration to blend Nvidia’s accelerated computing stack and AI capabilities with Intel’s vast x86 ecosystem—a development that may shape the next generation of personal computing hardware.
Intel’s shares reacted sharply to the announcement, surging 30% in pre-market trading, signalling strong investor approval of the deal. While Nvidia’s investment will bolster Intel’s financial position, the partnership also aligns with the strategic goal of maintaining domestic US leadership in critical semiconductor technologies amid intensifying global competition.
Though the companies have been fierce competitors for decades, the new alliance signals a shift in the semiconductor landscape, where collaboration may become essential to innovation and market leadership in an era dominated by AI and high-performance computing demands. The deal reinforces the pressing need in the US to secure the future of chip manufacturing as technological complexity rises and supply chains become more strategic.
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Source: Noah Wire Services
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