Nvidia Is Investing $5 Billion in Rival Intel: ‘A Game Changer Deal’
The two companies intend to combine Nvidia’s AI power with Intel’s expertise to create new chips.
Key Takeaways
- Nvidia is pouring $5 billion into rival Intel to develop new chips together.
- Intel has faced significant challenges, including three years of decreasing revenue, as it struggles to keep up with Nvidia and AMD.
- Nvidia CEO Jensen Huang said the deal would fuse “two world-class platforms.”
Nvidia, the world’s of AI chips, and the most valuable company in the world with a market cap, on Thursday that it will invest $5 billion in competitor Intel, which has a comparatively lower () market value. The investment gives Nvidia in Intel.
The deal requires that Nvidia and Intel work together to create chips for personal computers and data centers. Intel’s specialty is , or chips that act as the brain of a computer, handling different general-purpose tasks. Nvidia, on the other hand, focuses on making that can process large amounts of data for more specialized, intensive tasks like AI development, gaming, and video editing.
The two companies are now joining forces to create chips that build on both areas of expertise. They intend to design chips that combine Nvidia’s AI strengths with Intel’s central processing power — “a fusion of two world-class platforms,” Nvidia CEO Jensen Huang said .
“Together, we will expand our ecosystems and lay the foundation for the next era of computing,” Huang stated in the release.
Meanwhile, Wedbush researcher Dan Ives following the announcement that “this is a game-changer deal for Intel” that “brings them front and center into the AI game.”
Intel was once a significant player in the chip industry, but has struggled to adapt to shifting technologies like mobile devices and AI.
The chipmaker faced significant challenges, including of declining revenue and loss of market share to competitors, such as Nvidia and AMD. Nvidia captured between 70% and 95% of the AI chip market last year, compared to Intel’s less than 1%, per .
Intel has attempted to cut costs, announcing layoffs that affected 33,000 people earlier this year, reducing its workforce to 75,000 employees.
Related: Intel Requires Employees to Work From the Office More Often: ‘This Action Is Necessary’
In August, the U.S. government announced that it was taking a close to 10% stake in Intel, investing $8.9 billion for 433.3 million shares. At the time of writing, that stake is now worth $13.9 billion. Intel last month also agreed to a from Japanese holding company SoftBank.
In the press release, Intel CEO Lip-Bu Tan said that the new partnership with Nvidia would “enable new breakthroughs for the industry.”
“We appreciate the confidence Jensen and the Nvidia team have placed in us with their investment,” Tan stated in the release.
Intel shares at Thursday’s market open following news of the Nvidia investment, while Nvidia stock .
Key Takeaways
- Nvidia is pouring $5 billion into rival Intel to develop new chips together.
- Intel has faced significant challenges, including three years of decreasing revenue, as it struggles to keep up with Nvidia and AMD.
- Nvidia CEO Jensen Huang said the deal would fuse “two world-class platforms.”
Nvidia, the world’s of AI chips, and the most valuable company in the world with a market cap, on Thursday that it will invest $5 billion in competitor Intel, which has a comparatively lower () market value. The investment gives Nvidia in Intel.
The deal requires that Nvidia and Intel work together to create chips for personal computers and data centers. Intel’s specialty is , or chips that act as the brain of a computer, handling different general-purpose tasks. Nvidia, on the other hand, focuses on making that can process large amounts of data for more specialized, intensive tasks like AI development, gaming, and video editing.
