Nvidia has agreed to purchase 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 acquire 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 were up as much as thirty percent in early trading on Thursday morning.
The companies will integrate their two architectures using Nvidia’s NVLink interface. This technology enables faster data and control code transfers between CPUs and GPUs compared to other standards like PCI Express. This speed is crucial for AI applications, which require many GPUs to run together and process 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 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.
The deal arrives after a rough few years for Intel, which has struggled to capitalize on the AI chip race, unlike its new partner. Intel recently brought on a new CEO, laid off thousands of staff as it sought to shore up margins, and canceled manufacturing projects to prioritize greater financial discipline.
This partnership comes on the heels of another record quarter for Nvidia, which has grown into the world’s most lucrative semiconductor company and one of the largest companies by market cap. Over the same period, Intel has struggled to keep pace with market fluctuations, particularly the intense semiconductor demands of AI. As a result, this collaboration could allow Intel to win back 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 breakthroughs for the industry.