Nvidia Closes $5 Billion Intel Investment, Becomes 4% Shareholder in Strategic AI Partnership
New Delhi: Nvidia has officially closed its $5 billion investment in Intel, acquiring 214.8 million shares at $23.28 each on December 26, a price roughly 36% below Intel’s market value at the time the deal was announced. The transaction, which received clearance from the US Federal Trade Commission earlier this month, marks a significant milestone for Intel as it seeks to recover from years of declining market share and financial pressure.
The deal makes Nvidia a nearly 4% shareholder in Intel, providing the chipmaker with a major capital infusion as well as renewed credibility in the global semiconductor industry. Since the investment was announced in September, Intel’s stock has risen about 45%, reflecting improved investor sentiment. However, both stocks saw modest movement in recent trading, with Nvidia down 1.8% and Intel up 0.5%.
Partnership extends beyond financial backing
The collaboration between the two technology giants goes beyond equity investment. Intel will design and manufacture custom x86 CPUs optimised for Nvidia’s AI server platforms, which will complement Nvidia’s in-house Grace processors. The companies also plan to develop PC chips that combine Intel CPU cores with Nvidia RTX graphics chiplets, connected through Nvidia’s NVLink interconnect technology.
Nvidia CEO Jensen Huang had earlier described the deal as a “historic collaboration,” while Intel CEO Lip-Bu Tan said the partnership validates Intel’s x86 architecture and manufacturing capabilities. For Nvidia, the alliance offers a smoother pathway into enterprise x86 systems without requiring customers to overhaul existing software environments.
Intel’s market challenges remain stark
Intel’s urgency is underscored by its dramatic loss of dominance in the data centre segment. Once commanding nearly 70% market share in 2021, Intel’s presence has fallen to just 7% in the most recent quarter, as Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC) surged ahead in AI and advanced chip manufacturing.
Despite the partnership, neither company has committed to shifting Nvidia’s high-end GPU production from TSMC to Intel’s contract manufacturing operations. This suggests the relationship is focused more on strategic alignment and product collaboration rather than a full-scale foundry transition.
For Intel, however, Nvidia’s investment provides more than just capital. The endorsement from the world’s leading AI chipmaker signals confidence in Intel’s long-term turnaround efforts at a time when restoring trust among customers and investors remains critical.
Final Thoughts
Nvidia’s investment gives Intel both financial relief and a vital vote of confidence at a challenging juncture. While the partnership does not immediately resolve Intel’s competitive gaps, it strengthens its relevance in the AI ecosystem and buys valuable time for execution. The success of this alliance will ultimately depend on whether Intel can translate collaboration into sustained technological and market recovery.
