Nvidia buys $5B stake in Intel, planning AI chip collaboration

Nvidia has agreed to buy a $5 billion stake in Intel as part of a broader deal to together develop “multiple generations” of data center and PC products.

Nvidia will acquire the Intel stock for $23.28 per share, a slight discount on the company’s previous trading price. According to Reuters, the deal would make Nvidia one of Intel’s largest shareholders, owning about 4% of the company. Intel shares were up as much as 30% in early trading on Thursday morning.

The companies will integrate their two architectures using Nvidia’s NVLink interface, which enables data and control code transfers between CPUs and GPUs. NVLink enables faster transfers between chips compared with other standards like PCI Express; that’s crucial for AI applications, which require many GPUs to run together and process immense workloads.

For data centers, Intel will manufacture a new line of x86 CPUs specifically customized for Nvidia’s AI infrastructure platforms, to be offered to enterprise and hyperscale customers.

For the consumer PC segment, Intel will build x86 system-on-chips that will incorporate chiplets of Nvidia’s RTX GPUs, which will no doubt give Intel an edge over rival AMD’s CPUs. The companies are calling these chips “x86 RTX SoCs” at the moment and claim these chips will power a “wide range of PCs.”

The deal comes after a rough few years for Intel, which has struggled to capitalize on the AI chip race unlike its new partner. Intel brought on a new CEO, laid off thousands of staff as it sought to shore up margins, and spiked manufacturing projects to prioritize more financial discipline.

The deal comes on the heels of another record quarter for Nvidia, which has grown into both the world’s most lucrative semiconductor company and, by market cap, one of the largest companies in the world. Over the same period, Intel has struggled to keep pace with the fluctuations of market demand, particularly the intense semiconductor demands of AI. As a result, the collaboration could allow Intel to win back market share from rivals like AMD.

“Intel’s leading data center and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable new breakthroughs for the industry,” said Intel CEO Lip-Bu Tan in a statement.