NVIDIA acquires $5B stake in Intel, plans joint chip development

**NVIDIA Acquires $5B Stake in Intel, Plans Joint Chip Development**

*By Mudit Dube | Sep 18, 2025, 05:09 PM*

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NVIDIA has announced a significant $5 billion investment in Intel, marking a potential game-changer for the semiconductor industry. Through this deal, NVIDIA will acquire Intel common stock at $23.28 per share—slightly below Wednesday’s closing price of $24.90 but above the recent government purchase price of $20.47.

### NVIDIA Becomes a Major Intel Shareholder

This strategic move will make NVIDIA one of Intel’s largest shareholders, holding a stake of 4% or more once new shares are issued. The investment provides a much-needed boost to Intel, which has faced challenges in turning its fortunes around in recent years.

Moreover, the deal poses a potential threat to Taiwan Semiconductor Manufacturing Company (TSMC), which currently manufactures NVIDIA’s flagship processors.

### What the Deal Excludes

It is important to note that the agreement excludes Intel’s contract manufacturing business—known as its “foundry”—which produces chips for other companies. Industry analysts believe Intel’s foundry division requires major customers like NVIDIA, Apple, Qualcomm, or Broadcom to remain viable.

Still, this investment adds to Intel’s growing capital reserves, coming on the heels of a $2 billion investment from SoftBank and $5.7 billion from the U.S. government.

### Collaboration to Enhance AI Technology

As part of the partnership, Intel will design custom data center central processors that NVIDIA will package together with its AI chips or GPUs. Using proprietary NVIDIA technology, this integration will enable faster communication between Intel and NVIDIA chips, potentially giving Intel a competitive edge in the AI market. Efficient chip-to-chip connectivity is critical for processing large volumes of data, and this collaboration could accelerate AI computing capabilities.

### Market Impact: A Challenge to AMD and Broadcom

Currently, NVIDIA’s advanced AI servers with high-speed interconnects are only available with NVIDIA’s own chips. This deal opens the door for Intel to enter this space, allowing both companies to monetize NVIDIA’s AI server infrastructure more effectively.

Together, the NVIDIA-Intel chip solutions could pose a significant threat to competitors like AMD and Broadcom, who are also developing AI servers and chip-to-chip connectivity technologies.

### Strategic Advantages in Consumer Markets

For consumer applications, NVIDIA will provide Intel with a custom graphics chip to be paired with Intel’s PC central processors. This combination could help Intel regain ground against rivals such as AMD in the personal computing space.

Despite pressure from Arm Ltd technology in data centers and PCs, Intel continues to hold a dominant market share in the x86 computing architecture. This partnership with NVIDIA could strengthen Intel’s position in both consumer and enterprise markets moving forward.

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This landmark deal between NVIDIA and Intel ushers in a new era of semiconductor collaboration, promising innovative chip solutions that could reshape the competitive landscape in AI and computing technologies.
https://www.newsbytesapp.com/news/business/nvidia-invests-5b-in-intel-forms-ai-chip-partnership/story