Nvidia and Intel team up with $5B for Semiconductor projects

U.S. semiconductor giant Nvidia announced on April 18 that it will invest US$ 5 billion in Intel, marking a significant milestone in Intel’s ongoing restructuring efforts. The move sent Intel’s stock soaring 22.8%.

Under the agreement, Nvidia will purchase newly issued Intel common stock at US$ 23.28 per share, giving it an ownership stake of over 4%. While the purchase price is slightly below the previous day’s closing price of US$ 24.90, it is higher than the US$ 20.47 per share the U.S. government paid last month when acquiring a 10% stake in Intel.

At a press conference, Nvidia CEO Jensen Huang emphasized that the Trump administration was not involved in brokering the deal, though he believed it would have supported the move.

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The partnership will see Intel and Nvidia jointly develop semiconductors for PCs and data centers. While the agreement excludes Intel’s foundry business from manufacturing chips for Nvidia, Intel’s foundry division will supply CPUs and advanced packaging for the jointly developed products. Huang noted that Nvidia has been evaluating Intel’s foundry technology over the past year and continues to collaborate on that front.

Industry analysts have long said Intel must secure a major customer to sustain its foundry business. Nancy Tengler, CEO of Laffer Tengler Investments, commented that this could be ‘the first step toward an acquisition or breakup of Intel by a U.S. semiconductor manufacturer,’ though she added that Intel ‘may well survive.’

Both companies said they will develop multiple generations of new products under this commercial partnership, not a licensing arrangement, where they will mutually supply semiconductors to support each other’s product development.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the collaboration aligns with U.S. industrial policy and could potentially lead to relaxed restrictions on the sale of advanced semiconductors to China.

This deal follows a US$ 2 billion investment from SoftBank Group and a US$ 5.7 billion investment from the U.S. government aimed at strengthening Intel.

The agreement could also pose competitive risks for Taiwan’s TSMC, which currently manufactures エヌビディア’s core processors, and impact AMD, Intel’s rival in data center semiconductor supply. Following the announcement, Nvidia shares rose 3.5%, while AMD shares slipped 0.8%.