Nvidia Corp. (NVDA.O) said on Thursday it will invest $5 billion in Intel Corp. (INTC.O) and jointly develop chips for personal computers and data centers, a surprise move that sent Intel shares surging 22.8% to $30.57 — their best single-day gain since October 1987.
The deal marks a strategic pivot for both companies, with Nvidia agreeing to purchase Intel common stock at $23.28 per share and integrate its graphics technology into Intel’s upcoming PC chips. Intel, in turn, will supply central processors for Nvidia-powered data center systems, combining its x86 architecture with Nvidia’s GPUs and networking stack.
“This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem,” Nvidia CEO Jensen Huang said in a statement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
The partnership follows nearly a year of negotiations and positions both firms to tap into new segments of the $50 billion-a-year computing market, according to Huang. Intel will also sell CPUs for notebooks and desktops that integrate Nvidia GPUs, further deepening the alliance.
The announcement comes as Intel seeks to reverse years of declining market share and financial losses. The chipmaker recently secured a 10% equity investment from the U.S. government, joining SoftBank and now Nvidia in backing its turnaround.
White House deputy press secretary Kush Desai called the Nvidia-Intel partnership a “major milestone for American high-tech manufacturing.”
Nvidia shares rose 3.54% on the day, underscoring investor confidence in the deal’s long-term potential.