Nvidia gives an update on the deal seen as a major financial lifeline for Intel
Nvidia has invested $5 billion in Intel, acquiring a significant stake. This strategic partnership aims to bolster Intel's struggling market position by leveraging its manufacturing capabilities for custom x86 CPUs and PC chips. The deal signifies a crucial step in Intel's turnaround, offering much-needed capital and industry validation.
Nvidia has invested $5 billion in Intel, acquiring a significant stake. This strategic partnership aims to bolster Intel's struggling market position by leveraging its manufacturing capabilities for custom x86 CPUs and PC chips. The deal signifies a crucial step in Intel's turnaround, offering much-needed capital and industry validation.
Nvidia closed its $5 billion investment in Intel on December 26, acquiring 214.8 million shares at $23.28 each—36% below Intel's trading price at the time of announcement. The transaction, cleared by the Federal Trade Commission earlier this month, marks a pivotal moment for Intel as it battles to reverse years of declining market dominance and financial strain.The deal transforms Nvidia into a roughly 4% Intel shareholder while providing Intel with desperately needed capital and credibility. Intel's stock has jumped 45% since September's announcement, though both companies dipped in Monday trading—Nvidia down 1.8% and Intel up just 0.5%.
Intel and Nvidia’s partnership goes beyond cash infusion
The partnership extends far beyond financial backing. Intel will design and manufacture custom x86 CPUs tailored for Nvidia's AI server platforms, positioning them alongside Nvidia's own Grace processors.The companies also plan PC chips that marry Intel CPU cores with Nvidia RTX graphics chiplets via NVLink interconnect technology.Back in SeptemberC Nvidia CEO Jensen Huang called the partnership a "historic collaboration,” while Intel CEO Lip-Bu Tan emphasized how the deal validates Intel's x86 architecture and manufacturing prowess. The arrangement offers Nvidia smoother entry into enterprise x86 systems without forcing customers to abandon existing software infrastructure.Intel's desperation is quantifiable: its data center market share collapsed from 70% in 2021 to just 7% last quarter as Nvidia and Taiwan Semiconductor Manufacturing surged ahead. The company has hemorrhaged both technological leadership and investor confidence over years of execution failures.Critically, neither company has committed to moving Nvidia's crown-jewel GPU production from TSMC to Intel's contract manufacturing—suggesting this remains primarily a strategic alliance rather than a foundry partnership.
For Intel, however, the Nvidia stamp of approval offers something nearly as valuable as cash: proof that the industry's dominant player still sees potential in Intel's turnaround story.