Nvidia shells out a whopping $5 billion for Intel's ventures.
In a groundbreaking development for the tech industry, Nvidia and Intel have announced a strategic partnership that promises to reshape the landscape of artificial intelligence (AI) and data center technology.
The partnership, which sees Nvidia investing $5 billion in Intel shares, comes at a time when Nvidia's chip systems are at the forefront of training and operating software with AI. As the world's most valuable company, with a current market capitalization of $4.3 trillion, Nvidia remains the leader in the AI chip market.
The news of this partnership has sent shockwaves through the industry, with Intel's stock temporarily jumping by around 28 percent in US trading due to the announcement. The CEO of Intel, Lip-Bu Tan, who was appointed in March 2025, has been leading Intel's transformation towards new industry-leading products and AI systems.
The partnership between the two tech giants is not without its roots in government intervention. Last year, the US government promised billions in subsidies to Intel, which served as the purchase price for the Intel shares that Nvidia is acquiring. However, US President Donald Trump demanded a stake in Intel in return for the subsidies, a demand that has now been fulfilled through this partnership.
The partnership will see Intel developing processors of its X86 system adapted to Nvidia's technology for data centers. This collaboration is a significant step for Intel, which has seen a decrease in significance in the chip industry in recent years. In response to this partnership, Intel is also planning to become a contract manufacturer for other chip companies.
Despite the promising developments, potential customers have been hesitant towards Intel's ambitious plans to build new factories. One such factory, planned for Magdeburg, has been cancelled. Smartphones and most tablets, which use technology from chip developer Arm, may also pose a challenge to the partnership's ambitions in the mobile sector.
Nvidia, previously known mainly for its graphics cards, has seen explosive growth in recent years. The company's CEO, Jensen Huang, stated that the partnership shows a fundamental change in the computer world. This change is expected to bring about advancements in AI, data centers, and possibly even the mobile sector, as the two tech giants work together to push the boundaries of technology.
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