The One and Only Intel, one of the most valuable corporations in the world is handing it a last-ditch lifeline.
Nvidia has an estimated market capitalization of $4,3 trillion. Today, it announced that $5 billion will be invested in Intel. Intel is a struggling US chipmaker, and was the subject of a recent unorthodox deal between the US Government. Intel’s shares rose more than 30% following this news.
Two American chipmakers will also be collaborating on products. Intel announced in an early morning statement that “Intel’s leading CPUs and x86 ecosystem will be seamlessly connected with Nvidia’s AI and accelerated computing capabilities using NVLink,” Referring to Nvidia’s technology which connects GPUs and CPUs.
Intel CEO Lip-Bu Tang posted a photo Jensen Huang, Nvidia CEO and cofounder. Tan said he’s excited to work with Nvidia. “good friend Jensen” Together, we will jointly develop customized data centers and PC chips.
Huang stressed in a briefing that this deal would allow Nvidia’s rack architecture system to be scaled up, combining 72 GPUs and custom CPUs. Huang said Nvidia will be able to take more of the market for personal devices by working with Intel. “There are 150 million laptops sold per year,” “He said” “We’re now creating a system-on-a-chip that fuses two processors into one giant SoC, and that will become a new class of integrated laptops that the world has never seen before.”
Huang estimated the value of the contract at between “$25 billion and $50 billion of annual opportunity.”
Nvidia invests in the same company that invested in the US government taking a roughly 10 percent stake in Intel Converting billions in CHIPS Act Grants into Equity Investments
US export controls have also been reviewed, limiting Nvidia (and AMD)’s ability to supply advanced GPUs in China. Administration recently announced it would issue export licenses to Nvidia, AMD and allow them to market certain chips into China if they paid the US Government a 15% cut.
Huang insists that Trump’s administration is not involved with Nvidia and Intel’s ongoing talks, Huang claims, for over a full year. “The Trump administration had no involvement in this partnership at all,” Huang said. “They would have been very supportive, of course. Today, I had the opportunity to tell [Secretary of Commerce, Howard Lutnick], and he was very excited and supportive of seeing American technology companies working together.”
Still, says Pat Moorhead, founder and principal analyst at Moor Insights & Strategy, “I do believe Nvidia scores points with the administration by making this investment.”
“The administration’s move to take a stake in the company definitely gives some momentum for Intel to attract more external investments, like the earlier investment from SoftBank, and today, Nvidia,” Ray Wang is the research director of Semiconductors and Emerging Tech at Futurum Group.
Wang pointed out that Intel Foundry Services were not included in the announcement for the Intel-Nvidia partnership. These services offer the latest chip design capabilities and manufacturing options to Intel customers. Nvidia relies primarily on Taiwan Semiconductor Manufacturing Company (TSMC) for these services. The TSMC is also responsible for some Intel chips.
