NVIDIA, Intel
A $5 billion investment from NVIDIA, part of a new collaboration to build an AI superchip, has sent Intel's shares soaring by 30 percent. The significant deal follows recent support for Intel from SoftBank and the US government.

The world of technology is buzzing with a groundbreaking collaboration. Two industry giants, NVIDIA and Intel, have come together in a massive $5 billion (£3.68 billion) deal to create a new AI superchip. This move could reshape the future of artificial intelligence.

On 18 September, the technology giants NVIDIA and Intel announced a new partnership. They plan to work together on multiple generations of bespoke data centre and PC products designed to accelerate various applications and workloads across large-scale, corporate and consumer markets.

Uniting Two Titans

In a recent press release about the partnership, NVIDIA stated that its goal is to connect the two companies' architectures. The firm will use NVIDIA NVLink to combine its own strengths in artificial intelligence and accelerated computing with Intel's leading CPU technologies and x86 ecosystem, ultimately delivering next-generation solutions for consumers.

In the data centre segment, Intel is set to manufacture bespoke x86 CPUs for NVIDIA. The Jensen Huang-led technology company will then incorporate these components into its AI infrastructure platforms before offering them to the public.

For personal computing, Intel plans to create a new line of x86 system-on-chips (SOCs) for the market. These will have NVIDIA's RTX GPU chiplets integrated directly into them. This new class of x86 RTX SOCs is designed to power a wide range of computers that require a powerful combination of both a CPU and a GPU.

A Multi-Billion-Dollar Investment

NVIDIA is set to acquire a $5 billion (£3.68 billion) stake in Intel's common stock, with each share priced at $23.28 (£17.14). However, this investment is contingent upon meeting the usual closing conditions, including obtaining the necessary regulatory approvals.

A report from CNBC showed that, following news of the agreement, Intel's share price soared by 30 percent to approximately $32 (£23.56) in premarket trading.

'AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software. At the heart of this reinvention is NVIDIA's CUDA architecture', said NVIDIA founder and CEO Jensen Huang.

'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. Together, we will expand our ecosystems and lay the foundation for the next era of computing', the top executive added.

Lip-Bu Tan, CEO of Intel, noted, 'Intel's x86 architecture has been foundational to modern computing for decades — and we are innovating across our portfolio to enable the workloads of the future.'

He continued, 'Intel's leading data centre and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA's AI and accelerated computing leadership to enable new breakthroughs for the industry.'

'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', Lip-Bu Tan said.

A Chorus of Supporters

NVIDIA has become the latest to lend support to Intel's turnaround, joining SoftBank and the US government. Intel shares, which had plunged to their lowest point in more than a decade earlier this year, bounced back after securing a 10 percent investment from the US government in an August deal with the Trump administration.

In August, SoftBank also invested $2 billion (£1.47 billion) in Intel. The government, meanwhile, provided an even larger injection of $8.9 billion (£6.55 billion) to acquire 433.3 million shares in the chipmaker. That stake is now valued at $13.9 billion (£10.24 billion), with shares currently sitting at just over $32 (£23.56).

What Comes Next

'What's unclear is whether this represents token cooperation intended for political purposes, or if it's the start of a wider collaboration that would more significantly benefit INTC', wrote Wolfe Research's Chris Caso in a note Thursday following the announcement.

According to Caso, the most pressing question is whether NVIDIA will manufacture its products at Intel's facilities.

While the investment is contingent on regulatory approval, it doesn't include NVIDIA manufacturing its chips at Intel's foundry. Huang and Lip-Bu Tan will hold a press conference on the deal at 1 p.m. ET, where more details may emerge.

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