Nvidia to invest US$5 billion in Intel in major boost to chipmaker’s turnaround
NEW YORK: Shares in Intel soared on Thursday (Sep 18) after Nvidia said it would invest US$5 billion in the struggling chipmaker, marking a major commitment to its turnaround efforts.
The move brings together two of the biggest names in semiconductors and follows support from both Japanese investment giant SoftBank and the US government, which last month took a rare 10 per cent equity stake in Intel.
President Donald Trump’s administration has described Intel as strategically vital given its role in powering the PC and internet revolutions, and Trump has signalled he is prepared to make similar interventions where he deems necessary.
“This is a game-changer deal for Intel as it now brings them front and centre into the AI game,” said Dan Ives of Wedbush Securities. “Along with the recent US government investment for 10 per cent, this has been a golden few weeks for Intel after years of pain and frustration for investors.”
AI COMPETITION HEATS UP
Intel has lagged rivals after missing key shifts in technology. It largely missed the smartphone boom and struggled to develop competitive hardware for artificial intelligence, while Taiwan’s TSMC and South Korea’s Samsung cemented their dominance.
Most notably, Intel was overtaken by Nvidia, whose graphics processing units (GPUs) – initially designed for gaming – became the essential building blocks of AI systems now sought by tech giants worldwide.
The partnership will focus on developing custom data centre and PC products tailored for AI applications. Nvidia will buy Intel stock at US$23.28 per share, pending regulatory approval.
Intel shares jumped more than 25 per cent on Wall Street, closing at US$31.25.
“This marks a fusion of two world-class platforms,” said Nvidia chief executive Jensen Huang. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
INTEL’S TURNAROUND PUSH
Intel’s new chief executive Lip-Bu Tan, who took over in March, welcomed the move.
“We appreciate the confidence Jensen and the Nvidia team have placed in us,” said Tan, a Malaysia-born tech veteran.
He has acknowledged the steep challenges facing Intel as it attempts a turnaround, particularly with US-China trade tensions weighing on the global semiconductor industry.
