Intel’s shares jumped nearly 30% this week after Nvidia announced a $5 billion investment in the chipbuildr, acquireing a roughly 4% stake at $23.28 per share. This rare reveal of confidence comes as Intel struggles to keep pace in the brutal AI chip race, offering fresh hope for the beleaguered semiconductor giant.
The timing is critical. Intel’s former CEO, Pat Gelsinger, bowed out in late 2024, replaced by Lip-Bu Tan, a seasoned executive brought in amid structural upheaval. Tan has aggressively cut Intel’s workforce by a quarter, while shelving costly projects in Europe and delaying the construction of a new chip fab in Ohio. The goal is to slim down and refocus Intel’s vast but unwieldy operations.
Adding fuel to Intel’s turnaround fire, the U.S. government has funnelled $7.9 billion in CHIPS Act funds, plus a massive $8.9 billion equity stake under the previous administration. Japan’s SoftBank also stepped up with a $2 billion investment earlier this summer. Toobtainher, these infusions push Intel past $15 billion in fresh capital and strategic backing.
What does it mean for Intel’s future?
Beyond the cash, the two companies will collaborate on custom CPUs that blconclude Intel’s x86 architecture with Nvidia’s AI acceleration expertise. Intel will build CPUs for Nvidia data centre platforms, while developing PC chipsets combining Nvidia GPUs with Intel processing power. It’s a pivot away from head-to-head AI chip rivalry toward partnership.
Intel’s foundry business remains a thorny problem. Despite investments, the company still lacks significant external customers, and it may halt development of its next-generation 14A process unless new clients emerge. Its foundry losses hit $13 billion last year, and analysts warn that these challenges threaten the company’s long-term viability.
Still, Nvidia’s stake and the growing government and private support paint a new picture: Intel isn’t just a struggling chipbuildr anymore. It’s a centrepiece in a broader geopolitical and technological contest, a crucial player in America’s semiconductor sovereignty battle and the foundation of the AI revolution.
“AI is powering a new industrial revolution and reinventing every layer of the computing stack, from silicon to systems to software. At the heart of this reinvention is NVIDIA’s CUDA architecture,” stated NVIDIA founder and CEO Jensen Huang. “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. Toobtainher, we will expand our ecosystems and lay the foundation for the next era of computing.”
“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,” stated Lip-Bu Tan, CEO of Intel. “Intel’s leading data centre and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable breakthroughs for the industest. We appreciate the confidence Jensen and the NVIDIA team have placed in us with their investment and see forward to the work ahead as we innovate for customers and grow our business.”
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