Nvidia Invests $5 Billion in Intel, Marking Historic Collaboration Between Chip Rivals

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AI giant throws lifeline to struggling semiconductor pioneer with major equity investment and technology partnership.

In a stunning reversal of fortune that would have been unthinkable just years ago, Nvidia Corporation announced today it will acquire a $5 billion stake in Intel Corporation, coupling the investment with an unprecedented technology partnership that could reshape the semiconductor industry. The deal, which values Intel shares at $23.28 each, represents one of the most significant strategic realignments in the chip sector's history.

The announcement comes as Intel struggles through its worst financial crisis in decades. The company posted a staggering $19 billion loss in 2024 (its first annual loss since 1986) and has seen its market capitalization plummet by 82% since 2000, from $502.7 billion to just $89.78 billion by April 2025, according to market data.

A Partnership Born of Necessity

The collaboration will see the two companies jointly develop multiple generations of custom processors for both data centers and personal computers. "AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software," said Nvidia founder and CEO Jensen Huang during the announcement. "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."

For the data center market, Intel will build NVIDIA-custom x86 CPUs that NVIDIA will integrate into its AI infrastructure platforms and offer to the market. In the consumer space, Intel will build and offer to the market x86 system-on-chips (SOCs) that integrate NVIDIA RTX GPU chiplets. These products will utilize Nvidia's NVLink interface, which affords up to 14 times more bandwidth along with lower latency than PCIe.

Intel's Mounting Challenges

The partnership arrives as Intel faces unprecedented challenges. Under recently departed CEO Pat Gelsinger, who was forced to retire in December 2024, the company announced plans to cut 15,000 jobs globally—15% of its workforce—as part of a desperate bid to reduce costs by $10 billion. The layoffs have continued under new CEO Lip-Bu Tan, with reports suggesting the company could eliminate up to 20% of its remaining workforce, affecting approximately 22,000 employees.

Intel's struggles extend beyond personnel cuts. In Q4 2024, Intel posted a net loss of $126 million, compared to a profit of $2.67 billion the year before. The company has fallen dramatically behind in the crucial AI chip market, where Nvidia commands a dominant position. Even its new AI-focused products like Gaudi 3 haven't generated enough traction, falling short of a $500 million revenue goal.

"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," said Intel CEO Lip-Bu Tan. "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."

The investment follows other recent capital injections into Intel, including a remarkable $10 billion investment from the U.S. government that grants the country a 9.9% ownership stake at $20.47 per share, and a $2 billion investment from SoftBank at $23 per share. Combined with government funding through the CHIPS Act, which includes $8.5 billion in direct funding and $11 billion in loans, Intel has secured significant financial backing for its turnaround efforts.

The deal, subject to regulatory approval, marks a defining moment for both companies—Nvidia cementing its position as a kingmaker in the semiconductor industry, while Intel accepts a lifeline from its most formidable competitor in the AI era.