Intel shares soar on $5 billion investment from Nvidia, plans to collaborate on new tech

Intel’s stock jumped more than 20% Thursday after it announced a $5 billion investment from Nvidia, along with plans to cooperate on new technology for data centers and PCs.

The deal is a tremendous boost for Intel because Nvidia’s chips dominate the market for artificial intelligence, a rapidly growing sector but one where Intel has no advanced products.

“It’s going to be brand new growth markets for Intel,” Jensen Huang, Nvidia’s CEO, said during an online press conference Thursday morning.

The two companies were vague about the timetable for their joint products or how much revenue they anticipate from their partnership. They also wouldn’t say whether Intel will produce the new chips in its own factories or outsource the work to Taiwan Semiconductor Manufacturing Co., which makes Nvidia’s own chips and has more advanced factories than Intel.

Still, investors welcomed the tie-up because it comes with $5 billion, links Intel’s future to Nvidia — the world’s most valuable tech company — and gives Intel a foothold in the artificial intelligence market.

“Money is helpful, and having Jensen’s blessing is priceless,” Bernstein Research analyst Stacy Rasgon wrote in a note to clients. Huang grew up in Aloha and graduated from Oregon State University, though he now lives near Nvidia’s headquarters in Silicon Valley.

Thursday’s deal also fueled speculation that Nvidia might someday shift some of its chip manufacturing from TSMC’s factories to Intel’s, though Huang would commit only to continue evaluating Intel’s production capabilities and how they match up with its rival’s.

“You just can’t overstate the magic that is TSMC,” Huang said.

Thursday’s agreement will bundle together chips that use Intel’s proprietary x86 architecture along special-purpose “chiplets” built with Nvidia’s designs and artificial intelligence capabilities. The new products will supplement similar products Nvidia already sells based on designs from ARM Holdings.

Additionally, Nvidia will buy Intel stock at $23.28 a share. That’s below Wednesday’s closing price of $24.90, so it will dilute the value of investors’ existing stake in Intel.

But the deal is already paying off for shareholders, with the stock climbing $5.77 Thursday to $30.67. That’s the highest point for Intel shares in more than a year. Intel’s stock had been up more than 30% early in the day; its gains diminished somewhat as Wall Street digested the deal.

For Nvidia, the financial commitment is relatively small because it has a market value of more than $4 trillion. It will now hold a roughly 4% stake in Intel, making Nvidia one of Intel’s largest shareholders.

The two companies are historically competitors but as Nvidia’s artificial intelligence business has grown, the segments in which Nvidia’s markets overlap with Intel’s are less significant.

Intel’s business has been in decline for several years, beset by faltering technology in its factories, inroads by competitors into the PC and data center industries, and Intel’s failure to develop chips for artificial intelligence.

The result has been two years of mass layoffs at Intel, which has eliminated more than 30,000 jobs across the company since the start of 2024 — including at least 5,400 in Oregon.

While Intel is still working to come back from its technology deficit, its financial situation has improved considerably over the past two months through a string of outside investments that have raised $16 billion.

In addition to the $5 billion from Nvidia, Japanese investment firm SoftBank has invested $2 billion in Intel and the Trump administration brokered an extraordinary, $8.9 billion investment by the federal government.

That deal turned Uncle Sam into Intel’s biggest shareholder, but Nvidia and Intel both said Thursday that the government played no role in their agreement. They said they had been working on a potential collaboration for a year.

“The Trump administration had no involvement in this partnership at all,” Huang said.

Intel still faces enormous challenges to develop more advanced computer chips and attract clients for its contract manufacturing business. Thursday’s deal means Nvidia is now invested, literally, in helping Intel along.