Nvidia has agreed to acquire a five billion dollar stake in Intel as part of a broader deal to jointly develop multiple generations of data center and PC products. Nvidia will purchase the Intel stock for $23.28 per share, a slight discount on the company’s previous trading price. This deal will make Nvidia one of Intel’s largest shareholders, owning approximately four percent of the company. Intel shares surged as much as thirty percent in early trading on Thursday morning.
The companies will integrate their architectures using Nvidia’s NVLink interface. This technology enables high-speed data and control code transfers between CPUs and GPUs. NVLink facilitates faster transfers between chips compared to other standards like PCI Express, which is a critical advantage for AI applications that require many GPUs to work together processing immense workloads.
For data centers, Intel will manufacture a new line of x86 CPUs specifically customized for Nvidia’s AI infrastructure platforms. These will be offered to enterprise and hyperscale customers.
For the consumer PC segment, Intel will build x86 system-on-chips that incorporate chiplets of Nvidia’s RTX GPUs. This integration is expected to give Intel a significant edge over rival AMD’s CPUs. The companies are currently calling these chips x86 RTX SoCs and claim they will power a wide range of PCs.
This deal follows a challenging period for Intel, which has struggled to capitalize on the AI chip race, unlike its new partner. The company recently appointed a new CEO, laid off thousands of staff to improve margins, and canceled manufacturing projects to prioritize capital expenditure discipline.
The agreement comes after another record quarter for Nvidia, which has grown into one of the world’s most lucrative semiconductor companies and one of the largest by market cap. Meanwhile, Intel has struggled to keep pace with market fluctuations, particularly the intense semiconductor demands of AI. As a result, this collaboration could allow the companies to reclaim market share from rivals like AMD.
Intel CEO Lip-Bu Tan stated that Intel’s leading data center and client computing platforms, combined with its process technology and manufacturing capabilities, will complement Nvidia’s AI and accelerated computing leadership to enable new industry breakthroughs.