Nvidia to Invest $5 Billion in Intel Amid AI Chip Boom
US chip giant Nvidia has announced plans to acquire a $5 billion stake in Intel, a move aimed at boosting the struggling semiconductor company while strengthening collaboration on next-generation chip development.
The deal, unveiled on Thursday, will see Nvidia take roughly a 4% stake in Intel, making it one of Intel’s largest shareholders. The partnership will focus on creating personal computer and data center chips to meet surging global demand for artificial intelligence technology and the massive data centers that power it.
The announcement sent Intel shares soaring by more than 25%, while Nvidia’s stock rose about 3% as investors welcomed the news.
Intel, once a dominant force in the global chip market, has struggled in recent years to expand its production capacity and compete with rivals. The company has been especially challenged by Nvidia’s rapid rise amid the AI boom, where its advanced chips have become essential for developing machine learning models and powering generative AI tools.
While Nvidia’s market value has skyrocketed past $4 trillion, Intel’s valuation has stagnated around $100 billion, underscoring the widening gap between the two companies.
Describing the alliance as “a fusion of two world-class platforms,” Jensen Huang, Nvidia’s CEO, said the companies are poised to “expand our ecosystems and lay the foundation for the next era of computing.”
Industry experts believe Nvidia’s decision is also strategic, allowing the company to diversify production away from Taiwan Semiconductor Manufacturing Company (TSMC) and support domestic chip manufacturing efforts in the US.
“Nvidia is now in the mode of investing in other companies in the AI ecosystem to keep the momentum for this emerging technology,” said Gil Luria, head of technology research at D.A. Davidson.
“It also aligns with the US administration’s push to strengthen the only American company capable of producing advanced chips at home.”
The investment comes shortly after the Trump administration announced a 10% federal stake in Intel, describing it as a “historic” step toward securing America’s leadership in semiconductors. The move followed months of tension between President Trump and Intel CEO Lip-Bu Tan, who faced criticism over alleged links to China — accusations he dismissed as “misinformation.”
Intel, once synonymous with the rise of personal computers, has been losing ground for years as competitors like Nvidia and AMD surged ahead. Its recent challenges have been compounded by its inability to fully capitalize on the AI revolution, leaving it trailing behind Nvidia’s cutting-edge offerings.
The collaboration also unfolds against a backdrop of escalating US-China trade tensions, which have affected both companies. Nvidia has been hit by strict US export controls and reported Chinese directives urging top tech firms to halt purchases of its AI chips. Huang recently expressed disappointment over the developments, warning that they could weigh on future sales.
Analysts note that Nvidia’s stake does not extend to Intel’s contract manufacturing business, a division that makes chips for other companies.
“This limits the immediate boost to one of Intel’s most challenged segments,” said Ray Wang, a semiconductor analyst at Futurum Group.
“However, it signals a shift in industry dynamics that could pressure competitors like AMD and TSMC.”
The Nvidia-Intel alliance marks one of the most significant partnerships in the semiconductor sector in years, potentially reshaping the balance of power in the AI-driven future of computing.
