NVIDIA Invests $5 Billion in Intel Stock
▼ Summary
– NVIDIA is investing $5 billion in Intel’s common stock, making it one of Intel’s largest shareholders with around 4% ownership.
– The companies will collaborate to develop multiple generations of custom data center and PC products for various markets.
– Intel will build NVIDIA-custom x86 CPUs for integration into NVIDIA’s AI infrastructure platforms and market offerings.
– The partnership aims to combine NVIDIA’s AI and accelerated computing with Intel’s CPU technologies and x86 ecosystem using NVIDIA NVLink.
– Following the announcement, Intel’s shares rose over 28% in premarket trading, while AMD and TSMC shares fell.
NVIDIA’s strategic investment of $5 billion in Intel stock has ignited a powerful market response, with Intel shares surging over 28% in premarket trading. This landmark deal not only positions NVIDIA among Intel’s largest shareholders but also establishes a deep technological partnership aimed at reshaping the future of computing infrastructure. The collaboration will see Intel producing custom x86 CPUs designed for NVIDIA’s AI platforms, marking a significant step in integrating two of the industry’s most influential architectures.
Under the terms of the agreement, NVIDIA will acquire Intel common stock at $23.28 per share, securing an ownership stake of approximately 4% once new shares are issued. This move represents a major vote of confidence in Intel, which has faced challenges in recent years amid intense competition and shifting market dynamics. The partnership extends beyond financial backing, with both companies committing to co-develop multiple generations of custom data center and PC products tailored for hyperscale, enterprise, and consumer applications.
Jensen Huang, NVIDIA’s founder and CEO, emphasized the transformative potential of the alliance, stating that AI is driving a new industrial revolution that demands a reinvention of the entire computing stack. He highlighted that coupling NVIDIA’s CUDA architecture and accelerated computing capabilities with Intel’s CPU technologies and the extensive x86 ecosystem will create a foundation for the next era of innovation. The integration will be facilitated through NVIDIA’s NVLink technology, ensuring seamless connectivity between the two platforms.
A central element of the collaboration involves Intel manufacturing custom x86 CPUs for NVIDIA’s AI infrastructure, which will then be marketed as part of NVIDIA’s comprehensive solutions. For the PC market, Intel will produce x86 system-on-chips incorporating NVIDIA RTX GPU chiplets, enabling a new class of high-performance devices that blend leading CPU and GPU technologies. These developments are expected to accelerate applications across data-intensive fields including artificial intelligence, machine learning, and advanced graphics.
Intel CEO Lip-Bu Tan noted that Intel’s longstanding leadership in x86 architecture, combined with its manufacturing and packaging expertise, will complement NVIDIA’s strengths in AI and accelerated computing. He expressed confidence that the partnership will drive industry-wide breakthroughs and expand the ecosystem for both companies.
The market reaction extended beyond Intel’s rally, with NVIDIA shares climbing 3.05% in premarket activity. In contrast, shares of AMD dropped nearly 5%, while TSMC’s U.S.-listed shares declined over 2%. Analysts suggest the partnership could challenge TSMC’s current role as NVIDIA’s primary chip manufacturer, with future production potentially shifting to Intel’s facilities. Additionally, AMD may face increased competitive pressure in the data center segment as a result of NVIDIA’s strengthened alignment with Intel.
(Source: Economy Middle East)
