**NVIDIA Acquires $5B Stake in Intel, Plans Joint Chip Development**
*By Mudit Dube | Sep 18, 2025, 05:09 PM*
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**Overview**
NVIDIA has announced a significant $5 billion investment in Intel, marking a potential turning point in the semiconductor industry. Through this deal, NVIDIA will acquire Intel common stock at $23.28 per share — a price slightly below Intel’s recent closing price of $24.90 but higher than the government purchase price of $20.47.
This strategic partnership not only establishes NVIDIA as one of Intel’s largest shareholders but also sets the stage for joint development of PC and data center chips by the two tech giants.
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**Details of the Stake**
Following the investment and issuance of new shares, NVIDIA is expected to hold a stake of 4% or more in Intel, positioning it among the company’s top shareholders. This infusion of capital comes as a significant boost for Intel, which has faced challenges in improving its market position in recent years.
Moreover, the collaboration signals potential disruption for Taiwan Semiconductor Manufacturing Company (TSMC), which currently manufactures NVIDIA’s flagship processors.
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**Deal Exclusions**
It’s important to note that this deal specifically excludes Intel’s foundry business — the contract manufacturing arm that makes chips for third parties. Industry analysts widely agree that Intel’s foundry business requires a major customer—such as NVIDIA, Apple, Qualcomm, or Broadcom—to remain viable.
This investment adds to Intel’s growing financial resources, which have notably increased with $2 billion from SoftBank and $5.7 billion from U.S. government funding.
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**Collaboration and Innovation**
Under their new partnership, Intel will focus on designing custom central processors for data centers, which NVIDIA will then package together with its AI chips or GPUs. A proprietary NVIDIA technology will enable enhanced, faster communication between Intel and NVIDIA chips.
This integration offers Intel a potential competitive advantage in the rapidly expanding AI market, where efficient connections between multiple chips are crucial for processing large data volumes effectively.
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**Market Impact**
Currently, NVIDIA’s AI servers with high-speed interconnects are exclusively paired with NVIDIA chips. This alliance will enable Intel to enter this space, potentially monetizing NVIDIA’s server ecosystem.
The combined Intel-NVIDIA chip offerings could pose a significant competitive threat to companies like AMD and Broadcom, both of which are developing their own AI servers and chip-to-chip interconnect technologies.
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**Strategic Advantages for Consumer Markets**
On the consumer front, NVIDIA will provide Intel with custom graphics chips to be integrated with Intel’s PC central processors. This collaboration could strengthen Intel’s position against competitors such as AMD.
Despite facing growing competition from Arm Ltd technologies in data centers and PCs, Intel still maintains a dominant market share in the x86 computing architecture — a position this partnership aims to reinforce.
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**Conclusion**
NVIDIA’s $5 billion investment in Intel and their plans for joint chip development represent a major strategic move in the semiconductor industry. This partnership not only bolsters Intel’s financial strength but also positions both companies to potentially reshape the AI and PC chip markets through innovative, integrated solutions.
https://www.newsbytesapp.com/news/business/nvidia-invests-5b-in-intel-forms-ai-chip-partnership/story