Nvidia to Invest $5 Billion in Intel, Becoming Its Largest Shareholder

In a major shake-up for the U.S. semiconductor sector, Nvidia announced on Thursday that it will invest $5 billion in fellow American chipmaker Intel. The move immediately boosted Intel’s stock price by 30 percent in premarket trading, while Nvidia’s shares also climbed about 3 percent.

Details of the Investment

Under the agreement, Nvidia will purchase Intel’s common stock at $23.28 per share, a price slightly below Intel’s closing rate of $24.90 on Wednesday. Even so, the valuation is notably higher than the $20.47 per share the U.S. government paid earlier this year when it acquired a 10 percent stake in Intel.

The investment will give Nvidia more than a 4 percent stake, making it Intel’s single largest shareholder. With this position, Nvidia gains both strategic influence and a significant financial foothold in one of the chip industry’s oldest names.

Joint Development Plans

Alongside the stake purchase, Nvidia and Intel will collaborate on developing next-generation computing technologies. According to reports, Intel will manufacture custom-designed x86 CPUs tailored for Nvidia, which will integrate the processors into its AI-focused infrastructure platforms.

The companies also intend to jointly design chips for personal computers and data centers, though the partnership will not extend to Intel’s contract manufacturing, known in the industry as its “foundry” business.

Nvidia CEO Jensen Huang emphasized the broader vision behind the collaboration, telling The Wall Street Journal: “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”

Context: Intel’s Shifting Role

The deal comes during a period of transition for Intel, once considered the undisputed leader of the global chip industry. In March, the company appointed Lip-Bu Tan as CEO, a move that sparked political backlash. Former U.S. President Donald Trump publicly criticized Tan over his business ties with China and even called for his resignation. That controversy paved the way for the U.S. government’s unusual acquisition of a 10 percent stake in the company, reflecting both strategic and national security concerns.

Intel’s new partnership with Nvidia represents an effort to regain ground in a sector where it has lost dominance to newer competitors, particularly in the high-performance and AI-driven chip markets.

Strategic and Political Implications

Market analysts view Nvidia’s investment as more than just a financial play. Chris Beauchamp, chief market analyst at IG Group in London, told Reuters that the move signals Nvidia’s intention to diversify its U.S. holdings while simultaneously strengthening ties with policymakers. He noted that the deal could be seen as a way for Nvidia to “score brownie points” with the Trump administration, which has placed heavy emphasis on keeping critical technology assets under American control.

For Nvidia, already the leading supplier of chips powering artificial intelligence systems, the partnership ensures greater access to advanced CPUs while deepening its integration across the broader computing ecosystem. For Intel, the collaboration may help stabilize investor confidence and reassert its relevance in an industry now shaped by AI, cloud computing, and geopolitical competition.