Intel spikes on Nvidia’s plan to invest $5 billion as part of a partnership to develop data center and PC products

Shares of Intel are mooning as the chipmaker has successfully hitched its wagon to the biggest star in the semiconductor space: Nvidia.

In a joint press release, the two companies announced “a collaboration to jointly develop multiple generations of custom data center and PC products that accelerate applications and workloads across hyperscale, enterprise and consumer markets” that will also see Nvidia purchase $5 billion in Intel stock at a price of $23.28.

“We appreciate the confidence Jensen and the NVIDIA team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business,” Intel CEO Lip-Bu Tan said.

Shares of Intel were up as much as 34% in premarket trading, which, if sustained, would be the biggest one-day gain for the stock ever, surpassing the 26.4% gain on October 29, 1987.

“The chip landscape remains NVDA’s world with everybody else paying rent as more sovereigns and enterprises wait in line for the most advanced chips in the world,” said Dan Ives, senior equity research analyst at Wedbush Securities. “Today’s announcement further strengthens the US lead in the AI Arms Race against China as Intel now goes from a laggard to a catalyst.”

This deal, which is subject to regulatory approval, would make the chip designer one of Intel’s largest shareholders, behind only index fund providers BlackRock and Vanguard, and also the US government.

Intel and Nvidia plan to codesign two products:

• Custom-made CPUs for data centers that Nvidia would integrate into its AI infrastructure platforms, and

• System-on-chips for PCs that integrate Nvidia’s RTX GPUs for better performance.

“This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms,” Nvidia CEO Jensen Huang said. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”

Advanced Micro Devices sank on this news, as the hits seemingly come on both sides: the PC-chip partnership threatens to see Intel reclaim market share from AMD in that space, while the deepening of Nvidia’s data center offerings may also further entrench its dominance in that market to AMD’s detriment.

“For Intel, the deal provides a lifeline for its struggling AI GPU efforts and a potential lift in AI PC share,” Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada wrote. “For Nvidia, it secures a path to remain central in AI compute regardless of whether x86, Arm or custom CPUs dominate, by embedding NVLink and CUDA deeper into the ecosystem.”